Medical Debt Bankruptcy in Arizona
Most people in the United States turn to bankruptcy as a way to climb out of a hole of debt that amassed over many years. One of the biggest reasons that bankruptcy is filed is because of medical debts. When illness comes upon someone, they may not have sufficient enough insurance coverage, which makes it difficult for them to keep up on the medical bills that begin to pile up. Medical treatments can be expensive, and it causes a lot of debt burden that is hard to overcome.
Medical Debts and Bankruptcy
Those Americans who have filed bankruptcy, an estimated 530,000 each year, the percentage that was tied to medical debt was 66.5%. Between Chapter 7 and Chapter 13, there are different approaches to medical debt problems.
Chapter 7 filing and medical debt
- If you do not earn enough money to cover all your debts, including medical bills, then using Chapter 7 bankruptcy for your medical bills may be the better option. There is no set number of debts that must be included in a Chapter 7 bankruptcy.
- Medical debts and other unsecured debts that have not been secured by any collateral can be discharged after a Chapter 7 bankruptcy. This means that when the court approves the bankruptcy, your debts are wiped away.
Chapter 13 filing and medical debt
- Sometimes you do not qualify for a Chapter 7 bankruptcy, leaving you with the only option, Chapter 13. Chapter 13 is the restructuring of debts. When you file Chapter 13, you will pay on your debts through a special repayment plan made by the court. Once the case has ended, the remaining debts are discharged.
Which Chapter is Best for Medical Debt?
An Arizona bankruptcy attorney will be the one who is best suited to help you decide which chapter filing is best for your medical debts. Due to the stipulations in Chapter 7, many do not qualify for it, making a total discharge of unsecured debt without any payment hard.
The nice part about Chapter 13 is that it allows you to pay pennies on the dollar before the debts are discharged. Chapter 13 also allows for your payments to count on your credit reporting. Do not be mistaken; the initial blow from filing bankruptcy will impact your credit score. But due to the payments being made to your creditors, your payment history will be better than if the debt is entirely written off.
Hiring the Right Attorney
Arizona bankruptcy attorneys are experts in matters related to bankruptcy. If you have mounds of medical debt that has piled up, making it hard for you to handle day-to-day life, a consultation with these experts could make all the difference.
The counsel you obtain for bankruptcy will be able to help you navigate the different options you have and help you choose the chapter that is best for you and your family. Filing a joint bankruptcy may help couples eliminate their medical debt and be able to move forward with a clean financial record. Do not hesitate to call one of these Arizona bankruptcy attorneys today.