Medical Bills and Bankruptcy

Your medical bills can be eliminated through bankruptcy

One of the leading contributors to bankruptcy is medical debt. Numerous New York residents have been laid-off and cannot afford to purchase health insurance. Even those who have health insurance, routinely incur enormous co-payments due to an accident or major illness. Many times, the medical care costs exceed their insurance coverage.

When buried in medical debt, it may seem hopeless. However, with the assistance of an experienced lawyer, you can repay your medical bills over time or discharge your medical bills outright through bankruptcy.

If you receive medical coverage through your employer, your insurance probably pays a good portion of your medical bills. However, if you or a family member suffers from a serious health problem or a catastrophic event, that 20 percent co-payment can quickly accumulate. The problem is that many of the modern health insurance policies have numerous loopholes.

Shockingly, almost three-quarters of the people who file bankruptcy due to their medical debt actually have health insurance. The majority of these people are well-educated, middle-class homeowners.

If the treatment received is not covered by your health insurance or you do not have coverage, medical bills could add up to tens of thousands of dollars becoming nearly impossible to pay.

Because medical bills are not a secured debt, they can be completely discharged in a Chapter 7 bankruptcy. Since there is not a limit on the amount of medical debt you can eliminate, you can discharge all of it.

If you have mortgage arrears, high income or non-exempt assets that hinder your candidacy for a Chapter 7 bankruptcy, you should consider a Chapter 13. This type of bankruptcy will still provide you with a reprieve from your creditors. At the conclusion of your repayment plan, any of your unsecured debts and medical bills that remain are forgiven.

You Need to Know When to File Your Bankruptcy Claim

Proper timing of your bankruptcy filing is essential. Any medical debt that you incur following the filing of your petition cannot be added to your discharge. This means that you should delay filing bankruptcy if you anticipate you will have continued medical expenses because of continuing medical treatment.

Frequently Asked Questions about Medical Debt and Bankruptcy

Will I be able to remain with my current physicians?

Most of the time patients want to continue treating with their current physicians. While you are required to list all of your medical debt, you can choose to continue making payments to particular medical providers and physicians.

The majority of clinics and hospitals have experience dealing with discharged medical debts. Because of this, these providers may be open to working with you to make payment arrangements for ongoing treatment or future services following your bankruptcy.

Will medical bankruptcy affect my health insurance?

No, filing medical bankruptcy will not affect how your health plan covers your medical expenses. You are obligated to continue paying for your unmet deductibles, co-pays and premiums. Once your health insurance has paid their portion under your policy’s limits, you may choose to discharge the unpaid portion in your bankruptcy case.

Seeking medical treatment in New York is stressful enough; the last thing you need to worry about is how you will pay the bill. Getting better should be your top priority. Once you have recovered, you can begin thinking about what you need to do to get your medical bills paid/resolved.

While it is true that the law is complicated concerning medical bills and bankruptcy, if you are unable to pay your medical bills, are facing garnishment, foreclosure or any other legal action, we can help. Contact us today so we can help you eliminate your debt.

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