Whether you’re experiencing a serious medical condition or you simply can’t keep up with medical bills, filing for bankruptcy may be the answer. However, it’s important to weigh your options before making a decision. While bankruptcy can help you get out of debt and protect your financial future, it can also make it more difficult to get medical treatment.
Before filing for bankruptcy, it’s important to understand what the laws are in your state. In some states, the medical debt will be discharged in bankruptcy, while in others, you will have to pay off a portion of the debt. This is due to the fact that medical debt is often considered an unsecured debt. In other cases, the medical debt is not discharged, and it will stay on your credit report for up to seven years.
In order to file for bankruptcy, you will need to pass the “means test” – which looks at your income compared to the expenses you need to pay. In order to pass the test, you must have a monthly income that is below the average income for your state. If you have a substantial amount of assets, you may not qualify for Chapter 7 bankruptcy. Instead, you will have to file for Chapter 13, which will require a repayment plan. The repayment plan will allow you to repay some of your medical debt over a period of three to five years. However, you may end up losing assets like your house in order to pay off your debts.
Choosing the best bankruptcy option for you is dependent on a number of factors. For example, you will need to consider whether you want to keep your assets or let them go. Typically, if you want to keep your assets, you will want to file for Chapter 13. You may also need to weigh the cost of bankruptcy against the cost of staying in your home. If you do file for bankruptcy, it will take about two to eight years before you can file again. This means that you may have to stay in your home until you can pay off your medical bills.
The benefits of filing for bankruptcy include a discharge of your medical debt, an automatic wage garnishment to pay off your debts, and a long-term reduction of your credit score. You will also lose some of your assets, such as your home, in bankruptcy, but you will have a greater chance of regaining them when you are able to pay off your medical debts.
Medical debt is one of the largest reasons that people file for bankruptcy. In fact, more than half of all bankruptcy filings include medical debt. However, if you can’t file for bankruptcy because you have a lot of medical debt, you should consider working out a payment plan with your medical provider. Some doctors and hospitals may offer a discount if you pay off your medical debts right away. In addition, you may be able to find a charity organization to help with your medical bills.
