medical-bankruptcy

4 Important Questions About Filing for Medical Bankruptcy for Medical Bills

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The high cost of healthcare costs causes a bankruptcy in the United States every 30 seconds. This comes as no surprise. Hospitals in this country expect patients to pay their debt as soon as they are up on their feet. In the 19th century, there are records of mothers who had to scrub the floors “within hours of delivery“. Leon Lederman, a Nobel Prize winner, had to sell his medal to pay his medical bills. Is filing for bankruptcy a solution? Here we discuss some legal advice on your options to find relief to this type of debt.

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What is medical bankruptcy?

Medical bankruptcy as such does not exist. Nevertheless, a person may acquire a substantial medical debt and medical bills in many circumstances: accidents, long term illnesses, or Covid-19 hospital treatment. A credit card can help at the beginning, but in many cases, the medical debt keeps on growing. Then you might consider filing for bankruptcy as a way to deal with substantial medical debt.

When you file bankruptcy for medical bills, a court proceeding starts. Here a judge and court trustee examine your salary and your expenses, including your liabilities and assets. Then they decide if you can discharge your medical debt. This means they eliminate medical bills, and you no longer are financially responsible for paying that money.

Will all medical bills be paid in bankruptcy?

Take note that this financial proceeding can only include the medical debt before you start to file your case. Many people think that the medical expenses they incur afterward may be covered as well, but this is not the case. It includes the medical debt that accumulates while your case is under review.

How can I get my medical debt forgiven?

Having to face any kind of debt can make life difficult. Sometimes we reach the point of not being able to pay any more money. The credit card is no solution because the interest rates can kill any possibility of paying back. Some people reach the point of selling their property to relieve this debt. Yet this situation has a solution. Our attorneys are experts at helping you get out of medical debt.

There are several ways of doing this. First of all, you have to be persistent. Do not give up! We are here to help you. You can get free advice at our office with one of our attorneys. Call us before you decide to sell your property or charge the debt on your credit card.

First of all, we advise you not to put your medical debt on your credit card because it will become a high-cost debt. But before filing a bankruptcy, we will help you find out if your hospital has any financial assistance policy. We will also assist you to stop debt collectors from calling you. We can also find lower prices, so your medical debt gets a smaller figure. If all of this does not work, we can start thinking together about bankruptcy. We have hundreds of satisfied clients who have continued with their lives in calm, knowing their debt is being taken care of.

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How to file for medical bankruptcy?

If the amount of medical bills you have to pay keeps growing, maybe it is time to start getting information about filing bankruptcy. We recommend you do not do open a bankruptcy case on your own. Get professional help, so you do not stand alone. Our law firm is an expert in this type of debt. Once you begin the attorney-client relationship, you will feel relief knowing your case is under professional care.

To begin a bankruptcy case, you will need to qualify for Chapter 7 or Chapter 13 bankruptcy. Take note that, even if medical bills are your primary reason for filing, you will need to list all your debts. It includes both secured and unsecured debts, including your credit cards. A bankruptcy attorney may help you put together this information, as well as help you file for Chapter 7 or 13. Our attorneys are experts at giving the judge an accurate representation of your whole financial situation for him to make a well-informed determination.

What is Chapter 7 bankruptcy?

To qualify to file this bankruptcy chapter, you must earn less than the state median income monthly. If you are in this group of people, with the help of our law firm, you will be able to submit to an examination of your financial records. A bankruptcy lawyer can guide you to get together all the paperwork for this examination, which must include both your income and your expenses. Then you have to include your secured debt (like real estate, car, and student loans) and your unsecured debt (like medical bills, credit card debt, and personal loans).

What is liquidation bankruptcy?

Chapter 7 bankruptcy is also known as liquidation bankruptcy. This type of bankruptcy is for people with a limited salary who cannot pay back their debt. If you file for Chapter 7 bankruptcy, the judge may determine you have to liquidate your available assets to help pay down your total debt. Take note that Chapter 7 bankruptcy may clear many other types of debts, as well as medical debts.

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What is Chapter 13 bankruptcy?

Now, if you are considering qualifying for Chapter 13 bankruptcy, you must know it works as an extended repayment plan. One of our attorneys can help you present a Chapter 13 bankruptcy case if you have enough income for a repayment plan for your debts – or even part of them. Chapter 13 bankruptcy works as an alternative to liquidation.

To be eligible to file for Chapter 13 bankruptcy, an individual must have some money in the bank. The person may have no more than $394,725 in unsecured debt, like credit card debt or personal loans. They may have no more than $1,184,200 in secured debts, which include mortgages for property and car loans. These figures may adjust to reflect changes in the consumer price index.

If you get a repayment plan for Chapter 13 bankruptcy, you have to pay back your debts in a period from three to five years. We recommend you use professional help to create the best repayment plan for your needs. It will also depend if your income is above or below your state median. Check it on this website for free.

How do I know if I should file for Chapter 7 or Chapter 13 bankruptcy?

This question can best be answered by an attorney who is working on your case. Chapter 13 bankruptcy is the best option for people who have a steady income. In this option, the client’s most significant problem is dealing with creditors’ demands for immediate payment. It can be the case of dealing with a credit card debt, for example. Get free advice from our attorneys to help you deal with your creditors today.

What is a mean test in Chapter 7 bankruptcy?

To file a Chapter 7 bankruptcy, a person has to pass one means test. A means test is a way of knowing whether the debtor has enough money to pay back the debt or part of it, even if he does it through a repayment plan. Your average monthly income is compared against the state median income. After considering your living costs, the test gives information on your options if you have any disposable income left. If you do not pass this test, you can still be eligible for a Chapter 13 bankruptcy.

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What are the consequences of filing for bankruptcy?

Filing for bankruptcy is not an easy decision. Working with an attorney may help to establish the best-case scenario for you. You can also get information on the consequences of filing bankruptcy.

Credit score

Be aware that bankruptcy will affect your credit score. It will show on your credit report for up from 8 to 10 years afterward. It means it could be difficult for you to obtain credit cards, favorable interest rates, and other credit-related privileges. For example, it might take more time to open a new credit line to acquire a property.

Medical providers

After filing bankruptcy, hospital bills are covered.  Your medical providers are also paid. Your health insurance plan and medical care should not be affected either. Nevertheless, your providers may be aware of the filing. In some cases, this means that some doctors may refuse to treat you in the future. Experience shows that most medical providers continue to give the same medical treatment to their patients as always because they understand their need for bankruptcy. If you see your medical provider inside a hospital or in an emergency, he cannot refuse to give you medical care.

Family

Be aware that if you have a jointly held debt o asset, including any property, in your family, these will have to be listed. Otherwise, your family will not be affected by bankruptcy. Helping your family understand the need for bankruptcy and debt relief may be another reason to hire a bankruptcy attorney. The attorney-client relationship may include a free extra consultation where the attorney explains to the family members what happens when you file a bankruptcy. Family members can ask any questions regarding medical debt, disposable income, property, creditors and credit cards. For example, child support is a priority, so it is paid before any unsecured debt. You will still have to pay for the child support debt because it is not erased.

Our law firm is an expert in like cases, so we always provide our clients with helpful and time-tested tips on how to start rebuilding life, jobs, and credit scores after filing.

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How do I file for bankruptcy if I have no money?

To file bankruptcy because you have no money is precisely the reason to do it. Any bankruptcy can provide you with much-needed debt relief. It may mean a clean slate to start to take control of your finances. The longer you wait to take control of your medical debt, the worse it can get. We provide our clients with a free initial consultation, so we can solve any doubts they have. We also guide them to think about a plan that may solve any secured and unsecured debts.

Should I file bankruptcy on my own?

You can but we recommend you do it with a lawyer. You can ask for a free consultation at our office. Rest assured that our firm is an expert to guide you in all the ways you can get rid of your medical debt and never acquire it again. Remember also that the government will require you to take two credit counseling courses. These credit courses give useful information on how to manage your credit moving forward. While medical bills are not a credit that can be misused, you will understand how not paying your debts can affect you in the future. These courses are no more than 60 minutes each and can be completed online or over the phone.

Filing for Chapter 7 Bankruptcy? The Bankruptcy Requirements to Know

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Chapter 7 Bankruptcy, also known as liquidation bankruptcy, is the most common bankruptcy case—63 percent of over 800,000 bankruptcy cases in 2016 were Chapter 7. It discharges most of the unsecured debts that include medical bills, personal loans, and credit card debts.

Being the quickest, most common, and the simplest type of bankruptcy to file doesn’t mean that filing Chapter 7 is that easy. There are very important bankruptcy requirements you need to understand in order to receive a discharge and protect your assets.

The Bankruptcy Means Test

Before filing for bankruptcy, you must have what’s known as a means test analysis performed, which determines whether your income is low enough to warrant a Chapter 7 bankruptcy filing. This formula is important in determining the type of bankruptcy you are eligible for, but you must also know the exceptions to means test when filing for bankruptcy.

If you undergo a means test and it’s determined that your income is too high, you may be required to file a Chapter 13 bankruptcy. This is considered a reorganization bankruptcy where you will need to pay a portion of your debts. A chapter 13 bankruptcy offers various alternatives to restructuring your debt over a 3, 4, or 5 year period.

If you have high expenses such as car loans, mortgage, daily expenditures, and taxes, you may still qualify to file for Chapter 7 bankruptcy even with a high income. One of the most important considerations is determining the amount of your monthly disposable income.

Passing the Means Test

In most cases, you must pass the “means test” for you to qualify for Chapter 7 bankruptcy. However, filing for bankruptcy doesn’t have to be a nightmare because there are just simple things to be considered before you can qualify. They include:

1. Little or No Disposable Income

The means test will compare your average monthly income with the median income of a household similar to yours. This is done for six months prior to filing bankruptcy. If your income is below the average income per household, you will qualify to file a Chapter 7 bankruptcy.

The average income per household varies from state to state. Hence, the means test must put your state in mind when doing the calculations.

2. Expenses against Income

It is not the end of the game for you if your income exceeds the average monthly income per household. You can still qualify to file for a Chapter 7 bankruptcy. However, you will not qualify automatically as you must fulfill the next bankruptcy requirements.

In this case, you will need to go to the next stage of the means test. This is the balancing stage that weighs your total income versus the expenses you have. If all your expenses versus your income amount to little or no disposable income, you will be allowed to file a Chapter 7 bankruptcy.

Every city, state, county, or metropolitan region has its allowed amounts of expense categories. Some of these include all the necessities, transportation, and housing. Any expenses on luxury will not be used in the means test.

If your total expenses are still less than your average income, you may not qualify to file for Chapter 7 bankruptcy. This presumes you still have some disposable income, which you can use to pay your debts. However, this presumption may be rebutted in certain circumstances to allow you to still qualify for chapter 7 bankruptcy.

Do I qualify for Chapter 7 after passing the test? Not yet. There are other things that you must consider before qualifying for this bankruptcy.

Prior Bankruptcies

If you had filed for Chapter 7 bankruptcy before and received a debt discharge, you need to wait eight years from your prior case filing before filing another bankruptcy.

However, if you filed before and did not finish the case or did not receive a discharge, you’re allowed to file for a Chapter 7 bankruptcy anytime. Of course, you must still pass the means test for the second filing.

If you filed a Chapter 7 bankruptcy, failed the means test but received a discharge under Chapter 13 bankruptcy, you need to wait for at least six years from your prior case filing before filing for a Chapter 7.

If you filed for Chapter 13 bankruptcy but did not complete the case or failed to get a discharge, you can file for Chapter 7 bankruptcy anytime.

Prebankruptcy Credit Counseling

Filing for bankruptcy is a tiring and stressful process that can put you through tremendous pressure and stress if you’re not careful. This is why it is a requirement that you go through a pre-bankruptcy credit counseling course at least six months before the bankruptcy filing.

The course is provided by an approved agency, which will give you a certificate after completion of the course and the certificate is only valid for 6 months. You must produce this pre-bankruptcy credit counseling certificate in court when filing for bankruptcy.

If You Qualify for Chapter 7 Bankruptcy

Things don’t end at Chapter 7 qualifications. Filing for any bankruptcy that is fit for you is a long process that involves a lot of analysis and review of your paperwork. Completing everything and obtaining a final discharge can take you up to four months.

The first thing you need to do is file a petition with your designated bankruptcy court. You will need to file various bankruptcy pleadings, which details your income, expenses, assets, liabilities, and overall financial standing.

Secondly, you must be prepared to spend some fees, including paying an attorney, credit counseling, and payment for petition filing. You must also be prepared for potential loss of privacy and financial control.

If You Don’t Qualify For Chapter 7 Bankruptcy

All hope is not lost if you don’t qualify for Chapter 7 bankruptcy. You can still file Chapter 13 bankruptcy. This bankruptcy will require you to make monthly payments for a period of three to five years. This payment will undergo a strict budget, which is monitored by the court.

Chapter 13 bankruptcy is still not a bad idea because it will still help you handle some debts that will not go away in Chapter 7, and Chapter 13 has the ability to restructure vehicle payments, mortgages and property taxes to stop repossessions and foreclosures.

Let’s Help You Fulfill Bankruptcy Requirements

Filing for a Chapter 7 bankruptcy will help you get relief on some debts. It is very important to understand the Chapter 7 bankruptcy requirements as you may be at risk of losing your hard-earned assets, such as homes, vehicles, and savings if those assets are not properly exempted. However, you must also understand that rebuilding yourself and getting back on track can be a rigorous process. Bankruptcy will stay on your credit report for up to ten years.

Therefore, it requires a lot of consideration before you go through it, even when you meet all bankruptcy requirements. If you want help going through a bankruptcy process, contact us, and we will connect you to a bankruptcy attorney near you.