The Bankruptcy Process For Someone With Medical Debt

The Bankruptcy Process For Someone With Medical Debt from Stephen Kass

Many people think bankruptcy only happens to people who were financially irresponsible. In fact, over 60 percent of all bankruptcies are caused by medical bills, and it wasn’t always because the person didn’t have insurance. Whether it’s due to a high deductible, policy exclusions for emergency transportation or certain treatments, or no coverage for lost time from work, a hospital visit can quickly ruin the finances of even the most financially prudent people.

Here’s an example of how things can quickly snowball

  1. Sudden illness with a hefty hospital bill
  2. Extended recovery leading to no pay and being laid off from work
  3. Other bills start adding up — the average U.S. job search is nine months
  4. The new job doesn’t pay enough to catch up on bills and cover interest
  5. Credit cards or other loans go into default
  6. The first lenders to file lawsuits receive a wage garnishment making the remaining bills impossible to pay
  7. Even if the mortgage has been paid up until this point, the bank threatens to initiate foreclosure unless all bills are paid in full — an impossible task at this point

There is a way out through bankruptcy.

  • Filing for bankruptcy puts debt collectors on hold.
  • This includes no car repossession and no home foreclosure.
  • During bankruptcy, a manageable Chapter 13 bankruptcy payment plan will be created for those with a regular income, and others will have the option of filing for a Chapter 7 liquidation bankruptcy (a house, car, and other essential belongings are generally exempt).
  • As long as the terms of the bankruptcy plan are met, any remaining debts will be discharged.

If you feel like your debts are starting to snowball, contact a bankruptcy attorney as soon as possible. While a bankruptcy is a major life decision, it may very well be the fastest way to eliminate stress, move on with your life, and secure your financial future.

Table of Contents

Contact Us

Featured Blog Posts

What is IRS? IRS Tax and Audit Guide: Role of Internal Revenue Service in Enforcing Federal Tax Laws. Contact the IRS for Federal Tax Return, Form W-9 and More.

Introduction to What is IRS (Internal Revenue Service) The Internal Revenue Service (IRS) is a critical agency within the United States responsible for administering and enforcing the federal tax laws for the United States government. It plays a pivotal role in funding essential public services and supporting the nation’s economic

Read More »

Where is my New York State tax refund?

Introduction When tax season comes to a close, many New Yorkers eagerly anticipate receiving their state tax refunds. It’s a well-deserved reward for diligent taxpayers, providing a financial boost that can be used for various purposes. In this article, we will explore the ins and outs of the New York

Read More »

Top Tax Lawyer NYC Articles

Browse our collection of expert articles pertaining to new york sales tax, ny state tax refund, 
ny state income tax, and other
tax in new york topics.

Miami Florida Tax Articles

Florida Tax Guide Is Social Security Taxed in Florida Federal Tax Benefits of Retiring in the State

Florida Tax Guide: Is Social Security Taxed in Florida? Federal Tax Benefits of Retiring in the State of Florida 2023

Social Security benefits serve as a vital source of income for many retirees. As individuals near their golden years, understanding the nuances of Social Security taxation becomes crucial. In this

September 11, 2023
Florida Tax Information for Taxpayers and Tax Professionals Do I Need to File State Income Taxes in

Florida Tax Information for Taxpayers and Tax Professionals: Do I Need to File State Income Taxes in Florida? Role of Florida Department of Revenue

Are you a resident of the Sunshine State wondering about your state tax obligations? Understanding whether you need to file state taxes in Florida is essential to ensure compliance with

August 28, 2023
Florida State Tax Rate Is There An Income Tax in Florida Everything You Need To Know About Fl ()

Florida State Tax Rate 2023: Is There An Income Tax in Florida? Everything You Need To Know About Florida Tax. Florida Income Tax Calculator

In a world where state income taxes are the norm, Florida stands out as a haven for residents seeking a reprieve from this financial burden. The Sunshine State has gained

August 18, 2023

Have More Questions?

If you have not found the Tax & Accounting answers you are looking for, feel free to search here and browse our article catalog!