Even with excellent health insurance, you can incur substantial medical bills after an injury in an accident or you become ill. Medical debts are one of the common reasons that people file for bankruptcy relief. Fortunately, bankruptcy gets rid of medical bills. Through a Chapter 7 or Chapter 13 bankruptcy case, you can eliminate your medical debts.
Call Allegiant Law Group at 602-562-1000 to schedule a free bankruptcy consultation to learn more about filing bankruptcy for medical debts.
Medical Bills are Unsecured Debts
Medical bills are unsecured debts. An unsecured debt is money owed that is not secured by collateral. Chapter 7 and Chapter 13 bankruptcy discharges most unsecured debts, including medical bills. In a no-asset Chapter 7 case, the medical debts are discharged when you complete the bankruptcy case. Creditors with medical debts cannot take any further action to collect the debt after discharge.
In a Chapter 13 case, medical debts are included with other unsecured creditors. The creditors receive a portion of the amount owed through your Chapter 13 plan. At the end of the Chapter 13 case, any remaining amounts owed for medical debts are discharged. You are not legally required to repay the remaining balances owed for the medical bills.
What About Debt Collectors and Debt Collection Lawsuits?
Medical bills transferred to a debt collector or purchased by a debt collector are still eligible for a discharge in bankruptcy. Bankruptcy laws prohibit the original creditor and the debt collector from taking any actions to collect a discharged medical bill.
If the creditor or debtor collector has filed a lawsuit to collect the debt, filing bankruptcy stops the lawsuit. The lawsuit should be dismissed upon completion of your bankruptcy case, and the debt is discharged. If the creditor obtained a personal judgment for the medical debt, the judgment is null and void once the debt is discharged through your bankruptcy case.
Should I File Bankruptcy for Medical Debts?
Deciding whether to file a Chapter 7 or Chapter 13 bankruptcy case can be complicated. There are many factors to consider before filing for bankruptcy relief. If you do not have other debts, there may be another debt-relief option that you might want to pursue before filing bankruptcy.
Our Arizona bankruptcy attorney analyzes your financial situation to determine how a bankruptcy filing impacts your overall situation. A bankruptcy filing gets rid of debts, but it can also impact other areas of your finances.
If you are unsure whether bankruptcy for medical debts is right for you, we encourage you to contact our office for a free consultation with a Phoenix bankruptcy attorney. You can learn more about Chapter 13 and Chapter 7 from an experienced bankruptcy professional.
Filing bankruptcy can:
- Eliminate medical debts, credit card debts, and other unsecured debts
- Stop foreclosures and repossessions
- Stop wage garnishments
- Protect your property from creditors
- Stop creditor harassment
- Stop debt collection lawsuits
- Protect retirement accounts and income
- Relieve stress and anxiety
Contact a Phoenix Bankruptcy Attorney Today to Discuss Filing Bankruptcy for Medical Debts
If you have questions about Chapter 7 or Chapter 13 bankruptcies, contact Allegiant Law Group to discuss your debt relief options with one of our bankruptcy professionals. We understand that you are dealing with a serious financial crisis. Our legal team is here to help you explore your debt relief options to find an affordable way out of debt. Here are some other resources to pay for your medical debt provided by USA GOV.
To schedule your free bankruptcy consultation with an Arizona bankruptcy lawyer, call 602-562-1000 now.