Using Bankruptcy to Discharge or Reorganize Medical Expenses

Take the Right Steps to Maximize Your Benefit

Using Bankruptcy to Discharge or Reorganize Medical ExpensesWhen you’re hurt in an accident or suffer a debilitating illness, your first priority needs to be your health. But what are your options if you require care that’s not covered by your health insurance? Can you use a bankruptcy filing to permanently rid yourself of exorbitant medical costs or reorganize them so that the payments are within your means?

Discharging Medical Debt in Chapter 7

You may be able to discharge, or permanently wipe out, medical expenses with a Chapter 7 bankruptcy filing. It’s important to understand, though, that you first must qualify to file under Chapter 7 by submitting to a “means” test. The means test determines whether you have the resources to repay your creditors in a Chapter 13 bankruptcy proceeding. If the bankruptcy court determines that you do, you won’t be able to discharge debts using Chapter 7.

It’s also important to understand that if you do qualify for discharge of debt, you can discharge only those debts incurred before filing your bankruptcy petition. For that reason, you should realistically assess your medical condition and determine how much more care (and uninsured expense) you can expect. It may be best to delay bankruptcy filing until most or all of your medical expenses are incurred.

Keeping Your Assets When You File for Bankruptcy Protection

If you own a home or a car and want to keep those assets, you might be better off filing for Chapter 13 reorganization. With a Chapter 13 filing, you renegotiate your debt and don’t have to give up any property. In a Chapter 7 filing, you can keep only property of a certain value within the allowable exemptions. Unfortunately, if your equity in a particular asset exceeds the available exemption, the bankruptcy court might liquidate the equity and use it to pay off your creditors. For example, if you own your home free and clear, the bankruptcy court can take your home, sell it at market value, pay you the amount of the exemption, and distribute the rest of the proceeds to your creditors.

Contact an Experienced Rockwall, Texas, Bankruptcy Attorney

At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.

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Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

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