If you find yourself in a financial situation where you are overwhelmed by medical bills, you may be thinking about bankruptcy as a solution. This may be the best option for you. The following are a few things you should be aware of.
Medical debt is usually a Chapter 7 bankruptcy filing
Chapter 7 bankruptcy is one in which debts are discharged completely. You no longer owe any money and get a fresh start. This is the type of bankruptcy that people usually file when they have credit card debt. Medical bills are in the same category because they are not secured loans. They are simply a debt that has been incurred and needs to be paid, but there was no collateral for the loan.
A Chapter 7 bankruptcy will only discharge your past debt
After your bankruptcy is approved, from the day of the filing, all of your bills will be eliminated. This is great if you have non-medical debt. All you need to do is avoid new debt. But with medical bills, it's different because you may have ongoing treatments. All medical bills after your bankruptcy are not covered. If you don't anticipate future bills, on a large scale, bankruptcy may be right for you. However, if you have ongoing treatments and surgeries, you may not want to file for bankruptcy. In addition, you will not be able to file a second bankruptcy for several years.
Your future health care may be an Issue
If you have debt with a doctor, and this debt is discharged through bankruptcy, they are under no obligation to continue as your doctor. A hospital is different. Hospitals cannot deny you treatment in an emergency. Whether in a walk-in emergency room or if a paramedic takes you to a hospital, they will have to treat you. It may be possible to claim bankruptcy on your medical bills, but pay a particular doctor on the side just for the medical bills you owe him or her.
It may be possible to settle your debt
Medical bills are often easier to negotiate than other unsecured lines of credit, such as credit cards. In addition, your settled debt will not be listed as a blemish on your credit report, or it will be easily removed. You should use an attorney for this type of negotiation.
If you're overwhelmed by medical bills, you may be able to file a Chapter 7 bankruptcy. This type of bankruptcy will discharge all of your medical debt, but it will only eliminate past bills. You will owe future bills, and you will not be able to file for bankruptcy for several years. This type of bankruptcy could affect future medical bills and relationships with your doctor. Debt settlement may be a better option for you than bankruptcy; however, this debt relief solution, as well as others, should be discussed with a bankruptcy attorney.
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