Almost always, filing for bankruptcy will eliminate medical debt. Timing is the most important factor in determining whether filing for bankruptcy is the best method to manage your medical bills. Due to the individual nature of medical issues, the best advice is to consult a qualified bankruptcy attorney in your area.
During a typical initial consultation, the attorney will determine, first, whether your circumstances warrant bankruptcy and, second, which form of bankruptcy best suits your circumstances. Chapter 7 and Chapter 13 are the two most frequent forms of personal bankruptcy that individuals can file.
In Chapter 7 bankruptcy, medical invoices are typically discharged, relieving you of your excessive medical debt. Once the bankruptcy petition has been filed, medical provider billing departments are prohibited from contacting, writing, or taking any other action to collect a debt from you. If the medical provider has transferred or sold the debt to a collection agency, the collection agency must cease all collection efforts.
In Chapter 13 bankruptcy, medical providers and debt collectors are prohibited from attempting to collect the debt, similar to Chapter 7 bankruptcy. In addition, debtors are prohibited from reporting the debt to a credit agency or contacting third parties.
Insolvency can be used to discharge liens
If you have been prosecuted by a medical provider or debt collector for medical bills and a judgment has been entered against you, you should be aware that the judgment acts as a lien against any real property you own. This can impact your ability to sell your property or refinance an existing loan in the future. This lien can be """"eliminated"""" in a bankruptcy proceeding. In other words, the bankruptcy judge has the authority to eliminate the lien permanently. All judgments, including judgments for medical expenditures, can result in wage garnishment and/or the freezing of your bank account. If this has already occurred, you should promptly seek legal counsel. If this has not yet occurred, obtaining legal counsel immediately can prevent it.
To summarize:
Medical expenses are dischargeable in chapter 7 and chapter 13 bankruptcy.
Due to the nature of medical care, each individual's situation is unique; if you are considering bankruptcy, you should consult an attorney immediately.
Filing for bankruptcy will halt all collection efforts and provide a clean slate.
If you have been prosecuted and a judgment against you has been rendered, the judgment acts as a lien against your real property.
If a judgment has been rendered against you, your bank account and wages may be garnished.
Consult with a bankruptcy attorney to discuss your options and how filing for bankruptcy can help you eliminate your medical debt. Remember that more than 60% of all bankruptcies are caused by medical debt. You are not alone.""
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