Can Filing Bankruptcy Help With Huge Medical Bills?
Those who avail healthcare facility in the USA will surely agree that this is certainly one of the greatest sources of huge expenses and debts in America. According to the report of the Consumer Financial Protection Bureau released in December 2014, around 43 million Americans are dealing with huge medical debts. And this consists of more than half of all collection tradelines, 52%. While getting bogged down with medical bills is becoming so common, more and more people are going for filing bankruptcy to get some relief financially. How can you eliminate your medical debts with bankruptcy? Our experienced Pittsburgh bankruptcy lawyer is going to explain the effects of Chapter 7 and Chapter 13 bankruptcy on your medical debts.What are Dischargeable Debts and Non-Dischargeable Debts?
When it comes to bankruptcy, people have a very negative idea about it. The moment everyone hears the word “bankruptcy”, their minds start thinking about losing all the assets, foreclosure, repossession, and so on. But the reality is far from it. In fact, bankruptcy has been proven to be one of the safest bets for those who are dealing with financial ruin. For example, if you are unable to pay the mortgage, filing for bankruptcy will buy you some time in the name of “automatic stay” during which your creditors won’t be able to go after you for the debt.
However, this is not the only benefit that bankruptcy has to offer. The biggest advantage you can get is by filing bankruptcy, you can eliminate your debts. With bankruptcy, you get dischargeable debts that you are no longer obligated to repay once the case concludes successfully. On the other hand, the non-dischargeable debts are those that don’t get discharged with the bankruptcy filing. You are always obligated to pay that. This includes:
- Spousal support or alimony
- Child support
- Fines and penalties of criminal cases
- Tax debts
Medical bills are considered to be non-dischargeable debts no matter which chapter of bankruptcy you are filing. With the help of bankruptcy Chapter 7 and Chapter 13, you can get rid of the expenses of surgeries, price of the medical equipment, and other medical costs. This is surely welcome news for those millions of Americans who are dealing with excessive medical debts.
In all the states of the US, this is considered to be dischargeable debt as per federal law. However, the case of exemptions according to federal law can vary from state to state. But when it comes to eliminating your medical debts, it is dischargeable in all the states.
The followings are the other dischargeable debts but not limited to:
- Personal loan
- Credit card debt
- Business debt
- Utility bills
- Past due rent
- Social security overpayment
- Fees for lawyer
One thing you need to keep in mind is that the whole chapter 7 bankruptcy offers you elimination of most of your debts, it takes away a majority of your assets. But chapter 13 offers you a repayment plan that allows you to keep most of your assets while you keep paying your creditors regularly. Our Pittsburgh bankruptcy lawyer can help you decide which one you should opt for.
For more assistance in filing for bankruptcy, come to Pittsburgh Bankruptcy Law Group.