Even with excellent health insurance, a person can incur substantial medical bills for an unexpected illness or injury. One surgery could cost tens of thousands of dollars. A chronic illness could result in hundreds of thousands of dollars. If the person does not have health insurance, the debt is impossible to pay.
Medical debt collectors are ruthless. They harass individuals demanding payment of debts that the person simply does not have the money to pay. Eventually, the medical creditors or the debt collectors may file a debt collection lawsuit. Unless the person has proof that he or she does not owe the medical debt, the judge grants a default judgment. A wage garnishment order may be entered allowing the creditor to take up to 25 percent of the person’s wages. In the event that wage garnishment issues are affecting your financial situation, contact a Mesa wage garnishment attorney that can offer legal advice for your situation.
It may seem hopeless. If you are struggling with medical bills, you may feel as if you have nowhere to turn. That is not true. Our Mesa bankruptcy lawyers are here to help. We understand you may be frightened and anxious. Do not spend another sleepless night worrying about medical bills. Call us to talk about ways to get rid of medical bills you cannot pay.
Chapter 7 and Medical Bills
Chapter 7 generally wipes out all medical bills that you owe. That includes medical debts related to:
- Physicians
- Hospitalizations
- Surgeries
- Therapy
- Diagnostic tests
- Medications and medical equipment
- Medical facilities
- Specialists
Medical bills are unsecured debts. The creditor does not hold a lien on your property to secure the medical debt. Chapter 7 discharges or forgives these debts. After you receive your bankruptcy discharge, the creditors holding discharge debts cannot take any further action to collect the debt.
Medical Bills and Chapter 13
Chapter 7 is not right for everyone. You must meet income qualifications for Chapter 7. Also, you could risk losing some property if you have substantial equity in high-value assets. A Chapter 13 bankruptcy case may be better, depending on your financial situation.
Chapter 13 also eliminates medical bills that you cannot pay. However, it does so through a repayment plan. Your
Chapter 13 plan payment is calculated based on several factors. Your income, expenses, debts, assets, and recent financial transactions can impact your Chapter 13 plan payment.
Since medical bills are unsecured debts, they receive a percentage of the debt owed based on your overall financial situation. In many cases, unsecured creditors only receive pennies on the dollar. Rarely do Chapter 13 cases pay unsecured debts in full.
When you complete your Chapter 13 plan and receive your bankruptcy discharge, the remaining amount owed on the medical debts is forgiven. As with a Chapter 7 discharge, the holders of discharged debts in Chapter 13 cannot take any actions to collect the debts.
Medical Bills Are Not Your Fault
Some people feel embarrassed about the need to file bankruptcy because of medical bills. However, incurring medical bills is not your fault. You need medical care. Anyone who requires intensive medical treatment would incur the debt. Even with health insurance or government medical benefits, the remaining balance owed to medical providers can be impossible to pay.
A bankruptcy filing gives you the debt relief you need to recover from the financial hardship caused by an illness or injury. You can get back on your feet and rebuild your finances with the help of the bankruptcy process.
Contact Our Mesa Bankruptcy Attorneys for More Information
If you cannot pay your bills, bankruptcy might be right for you. Learn about the bankruptcy process and how filing bankruptcy can help you get out of debt.
Contact 602 Law Group by calling 602-562-5000 now to schedule your free consultation with a Mesa bankruptcy attorney. Don’t let medical debt collectors frighten you into making a decision that is not in your best interest. Talk with an attorney first to make sure that you are taking the steps necessary to protect you and your family.