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Filing for Bankruptcy Due to Medical Debt

July 12th, 2019 at 6:34 pm

medical-debtMost of the time, a person files for bankruptcy because it is the last option for bills that cannot be paid. After all, a bankruptcy on your record can diminish your credit score and make it difficult to borrow money for items like a house or a car for years. When a person files for bankruptcy, it is because they have exhausted all other options. Unfortunately for many Americans, the thing driving them to file for bankruptcy is medical debt. According to CNBC, 66.5 of all bankruptcies filed in the United States between 2013 and 2016 were tied to medical issues such as high costs for medical care or taking time off of work for medical reasons. If you have found yourself in the precarious situation of too much medical debt, here are a few things you should know before you file for bankruptcy:

Your Medical Debt is Dischargeable in Bankruptcies

Here is the good news — medical debt is dischargeable in both Chapter 7 and Chapter 13 bankruptcies. The type of bankruptcy you file for will entirely depend on your financial situation and which option would make more sense. A Chapter 7 bankruptcy would completely eliminate your medical debt, while a Chapter 13 bankruptcy would reorganize your debt into manageable payments.

There is No Such Thing as a Medical Bankruptcy

Technically, there is no such thing as a “medical bankruptcy”; there is no bankruptcy that can only discharge your medical debts. If you have medical debt and you file for bankruptcy, it is treated as an unsecured debt, which is in the same realm as credit card debt, personal loans and utility bills. Filing for a Chapter 7 bankruptcy would wipe out ALL of your unsecured debts — not just your medical debt.

There May Be Other Ways to Repay Your Debt

Before you make the decision to file for bankruptcy because of medical debt, you should make sure that you have absolutely no other options. Once you realize you are becoming overwhelmed with medical bills, you should immediately contact your hospital or health care provider to see if they offer any type of repayment plans. At the very least, you should inform them that you cannot pay the entire amount, but will pay what you can. If medical bills are preventing you from paying your rent or mortgage, utilities or other important bills, you may want to consider filing for bankruptcy.

Hiring a Boerne, TX Bankruptcy Lawyer Can Make Your Life Easier

If you are overwhelmed with medical debt, filing for bankruptcy may be your best option. At the Law Offices of Chance M. McGhee, we can look at your financial situation and help you determine whether or not filing for bankruptcy to help with your medical debt is in your best interest. Our skilled New Braunfels, TX bankruptcy attorneys have years of experience under their belts and are prepared to guide you throughout the bankruptcy process. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.thebalance.com/what-to-know-about-filing-medical-bankruptcy-4159606

https://www.thebalance.com/practical-steps-to-file-medical-bankruptcy-4158129

https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-americans-file-for-bankruptcy.html

 

 

The Truth behind Bankruptcy Filing

July 16th, 2014 at 1:23 pm

bankruptcy filing, credit scores, impending bankruptcy, medical debt, San Antonio bankruptcy attorney, Texas bankruptcy attorney, unemploymentAmericans file for bankruptcy each year as the result of owing more money to creditors than can actually be paid. While often times the term “bankruptcy” is stigmatized and correlated with poor spending habits and large credit card bills, the truth is it is a necessary practice for economic relief in dire times.

Most people who file for bankruptcy are not irresponsible, nor are they trying to use the process as a means of simply walking away from their debt. US News stated in an article, citing a study by The Bureau of Labor Statistics, that as of April 2012 more than 5.2 million people across the country had been unemployed for six months or more. In addition to unemployment as a factor, money lost due to divorce is also a large contributor to outstanding debt, as well as medical expenses.

There are several other common misconceptions about bankruptcy filing and those who file. Consider the following misunderstood and misinterpreted bankruptcy concepts everyone should know:

  • Bankruptcy filing ruins credit scores permanently: Although many believe they will never be able to get another loan or credit card after filing, this is not necessarily the case. You may have to start slowly, but making regular payments on loans will gradually increase your score.
  • Bankruptcy may not forgive all kinds of debt: This is a widely held belief that often is not true. Certain types of debt and payments are not absolved with bankruptcy. These include obligations such as alimony and child support, some kinds of student loans, and any type of criminal fines.
  • Use of credit cards with an impending bankruptcy: Be wary of using your credit cards right before you file, and never deliberately run up your bills under the assumption that it will be forgiven. This practice has been deemed as committing fraud in the past, and you run the risk of getting stuck with the bills after the process anyway.

If you are struggling with debt problems in the San Antonio, Texas area due to job loss, medical issues, or any other reason, seek help from a San Antonio bankruptcy attorney today. Contact the Law Offices of Chance M. McGhee for all of your bankruptcy needs, and to start the process of financial relief and recovery.

The Financial Impact of Unpaid Medical Bills

July 10th, 2014 at 9:53 am

Attorney Chance McGhee, health insurance, high deductibles, insurance plans, medical bills, medical debt, medical expenses, San Antonio bankruptcy attorney, unpaid medical billsEvery year people suffer from medical conditions and injuries that leave them with much more than scars. They are also left with insurmountable bills. These bills can quickly pile up over time and become overwhelming. In the end, filing for a Texas bankruptcy may be the best option for financial recovery.

According to a study published by CNBC, almost 2 million people filed for bankruptcy in 2013 as a direct result of unpaid medical bills. And while it is easy to see how this can happen to someone without health insurance, the truth is that it can happen to anyone.

In 2013 nearly 10 million insured American adults had more medical bills from that year than they could pay off. Insurance plans have increasingly high deductibles and leave members with up to $10,000 in out of pocket expenses.

The rise in bankruptcies due to medical debt can be compounded by other issues as well. When an unexpected cost arises, often times people have no other choice but to pay with credit cards. Yet when paid with credit, interest must be taken into account as well, thus making large bills even larger. Consider the following statistics published by the National Patient Advocacy Foundation:

  • Medical expenses are a contributing factor in 62 percent of bankruptcies;
  • In 41.8 percent of cases, the person filing could designate a specific health issue;
  • 54.9 percent of bankruptcy filers specifically cited medical costs as a problem; and
  • 37.8 percent of people stated income loss due to illness as a contributing factor.

Texas bankruptcies, due to medical debt, are on the rise. Medical emergencies are by definition not planned, and therefore it is impossible to allocate finances in advance. If you have accrued significant debt due to unpaid medical bills, it is important to consult with an experienced San Antonio bankruptcy attorney to assess your options. Located in the San Antonio area and serving the surrounding area, the Law Offices of Chance M. McGhee provide all clients with professional bankruptcy services.

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210-342-3400

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