People file bankruptcy for a variety of reasons, and it’s usually not due to frivolous spending or irresponsible use of credit. Many people find themselves in difficult financial circumstances after the loss of a job or decrease in wages and turn to bankruptcy for relief. Sadly, for some people, an illness or injury can also lead to unmanageable debt, even with medical insurance. Fortunately, bankruptcy is an option for taking care of medical bills and giving you a fresh start.
What are my Options?
If you’re struggling with medical bills or your balance is so high that there’s no way you can keep up, you do have several options. You’ll want to talk to your medical creditors right away and not worry about what they will think if you call and ask for their help. They work with people in these situations every day, and some companies have programs and funding available to help. They may be willing to forgive a portion or all of your debt, based on financial need, and most organizations will set up a payment plan with zero percent interest. You just need to be willing to ask, and the worst that could happen is that they say no.
Of course there are some providers who are unwilling to work with their patients and demand immediate, full payment. If this is impossible for you and you’ve run out of options, it may be time to consider bankruptcy. When we meet, we’ll discuss your situation and conduct the means test, which will help us decide which chapter will benefit you most. Filing a Chapter 7 will discharge all of your unsecured debts without limits, and this includes your medical debt. For some people with high income or valuable property, a Chapter 13 may be a better fit. This type of bankruptcy reconfigures your debts, and you’ll propose a 3-5 year repayment plan to the court. After your priority debts and living expenses have been covered, any remaining income will go toward other debts, including medical bills. After your plan is completed, any remaining unsecured debt is discharged, even if you’ve only paid a fraction of what you originally owed.
If you’re at the point of considering bankruptcy, chances are you’ve been dealing with the stress and pressure of your debt for some time. If your debt is related to medical expenses, this kind of stress can make any health issues even worse. You can’t put a price tag on your health, so it’s important to do whatever you need to do in order to heal, even if it means filing bankruptcy. Once the stress of your debt is behind you, you can focus on rebuilding and taking care of yourself.