It is no secret that serious injuries or illnesses inevitably cause upheaval in one's life. Prolonged ailments deprive people of their ability to earn a living. Unless independently wealthy, most people are one severe illness away from financial chaos. While many working Americans have health insurance, coverage is often not enough to protect them from the massive medical bills caused by extended illnesses.
Mounting medical debt can cause such emotional toil that it can threaten your way of life and keep you from recovering. When such debt becomes intractable, bankruptcy can help you gain a fresh financial start.
Under the U.S. Bankruptcy Code, medical debt is considered unsecured debt, meaning that there is no property (such as a house or a car) securing the debt. Upon proper application, you may seek court approval to obtain a discharge, thereby eliminating your legal obligation to pay that debt. Medical debts can be discharged in Chapter 7 or Chapter 13 bankruptcy in the same fashion as credit card debt and personal loans. Depending on your overall circumstances, you may qualify for Chapter 7 (liquidation bankruptcy) or Chapter 13 (wage earner's bankruptcy).
If you are considering bankruptcy due to burdensome medical debts, you are not alone. More than 60 percent of all bankruptcies filed between 2002 and 2007 were primarily the result of unmanageable medical debt. Debtors seeking bankruptcy protection averaged $17,943 in medical expenses and 75 percent actually had health insurance. It should also be noted that the healthcare industry has become so inflexible with their treatment of debt that lawsuits are being filed on their behalf more and more frequently.
Bankruptcy may be the start of a new financial beginning. To learn about your options regarding discharge of medical debt, contact an experienced bankruptcy attorney.
