Unpaid medical bills plague millions of Americans. Medical debt is the number one reason people file for bankruptcy. You may be wondering if bankruptcy can help if you have insurmountable medical debt. Our Las Vegas bankruptcy lawyers will answer your question and provide information about which bankruptcy chapters to consider to eliminate medical debts.
Understanding Medical Bankruptcy?
There is no legal chapter called "medical bankruptcy." However, filing for bankruptcy can help you pay your medical bills. In fact, for people facing a mountain of medical debt, bankruptcy can help reset your financial situation.
In California, Chapter 7 and Chapter 13 bankruptcy are the most common. Most bankruptcies are filed under Chapter 7. To qualify for Chapter 13, you must have regular income and prove that you can repay your debts within three to five years. If you don't meet these requirements, you will likely file Chapter 7.
Am I Eligible for Bankruptcy?
You must first pass a means test before you can file for bankruptcy. The means test determines if your income is too high to qualify for Chapter 7 bankruptcy. Even if your income is too high, Chapter 13 may still be an option. An experienced bankruptcy lawyer can help determine which bankruptcy chapter is right for you.
What Happens to My Medical Debt After Filing For Bankruptcy?
A bankruptcy filing gives you a "fresh start." This means that most, if not all, of your debts will be discharged. Medical debt is treated as any other unsecured debt in bankruptcy. If you file for Chapter 7 bankruptcy, your medical debt will be discharged along with your other debts, such as:
- Credit card debt
- Personal loans
- Past-due utility bills
- Back rent
The Benefits of Chapter 7 for Medical Debt
A bankruptcy filing offers an automatic stay. An automatic stay prevents creditors from pursuing collection actions against you. This includes wage garnishments, foreclosures, and repossessions. An automatic stay will also stop most lawsuits and contact from creditors.
Another benefit of Chapter 7 is that you can keep your property. In Nevada, you can exempt (or protect) certain types of property in bankruptcy. There are a few exemptions, such as the home, the car, the retirement accounts, and the personal belongings.
Begin Your Journey to Financial Freedom Today
Bankruptcy may be the best solution if you're struggling to pay it. Our team of experienced bankruptcy attorneys at [Sub:BusinessName] will guide you through the process and help you determine the best course of action for your financial situation.
If you need assistance with your bankruptcy case, contact us today at (702) 479-5322 to schedule a case consultation!