If you are unable to pay your medical bills or have been having difficulty making payments, bankruptcy might be the best option. There are two options available: Chapter 7 and Chapter 13. Both can be used to discharge all types of debt, even medical bills. Before you file for bankruptcy, there are some things you should remember.
Chapter 7 Bankruptcy to Eliminate a Medical Debt
Chapter 7 bankruptcy can be used to discharge medical debt. This type of bankruptcy allows you to eliminate most of your debts including medical bills. You must meet certain criteria to be eligible for Chapter 7 bankruptcy. These include low income and limited assets.
Chapter 13 Bankruptcy for Medical Debt Elimination
Chapter 13 bankruptcy is not a way to completely eliminate medical debt. The court will approve a Chapter 13 repayment plan. This plan will allow you to repay your medical debt over a longer time frame. The individual’s income and expenses will determine the repayment plan. Individuals who have difficulty paying their medical bills can use this tool.
Prepare to Answer Tough Questions from the Court
The court will ask many questions when you file for bankruptcy. The most important question is whether you are eligible for Chapter 7 bankruptcy. The means of testing determines this. To determine if you have the means to repay your debts, the means test examines your income and expenses. You may need to file for Chapter 13 bankruptcy if you fail the means test.
Even if you pass the means test, the court will still question your finances. This is done to ensure that you aren’t trying to avoid paying your debts by filing for bankruptcy. A judge may ask you about your assets or any other special circumstances that could impact your case.
This post was written by Trey Wright, one of the best bankruptcy attorneys in Tallahassee, Florida. Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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