Using Chapter 7 or Chapter 13 to Manage Medical Debt
If you’re facing a mountain of medical debt, with no idea how you’ll manage, you’re not alone. While it may be little comfort to you personally, it is consistently cited as the most frequent factor contributing to personal bankruptcy. By some estimates, more than a million people seek protection in bankruptcy every year because of overwhelming medical debt. Should you immediately contact a bankruptcy lawyer when you incur significant unreimbursed medical expenses? That depends.
The first thing to understand about filing for bankruptcy protection is that it will be reflected on your credit report. That may or may not be a good thing. Some future creditors may summarily reject you simply for filing bankruptcy. However, many creditors, once they understand the situation, may discount the mere fact of your bankruptcy, preferring instead to recognize that your filing was better than doing nothing (and letting the situation get worse). Many creditors are more interested in what you’ve done (and more specifically, what you’ve done lately) than they are about credit scores. Accordingly, if you do file for bankruptcy, make certain you honor the terms of the bankruptcy filing, make all remaining payments in a timely manner, and don’t unnecessarily incur any new debt.
If you’re thinking about using bankruptcy to get medical debt under control, consider taking these measures first:
- Try to negotiate a payoff with the medical services provider—In many instances, a creditor will waive some fees and let you pay over time, as it’s a better option than trying to recover pennies on the dollar in a bankruptcy proceeding
- Check to see if you qualify for any government assistance—There’s a federal program, the Hospital Care Assurance Program (HCAP), that provides assistance to individuals based on need. There are also requirements under the Affordable Care Act that non-profit hospitals make free/low-cost healthcare services available.
Contact Heath, TX Bankruptcy Attorney Carrie Weir
I provide a free initial consultation to anyone with questions or concerns regarding a bankruptcy filing. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.
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