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The United States healthcare system produces debt on a mass scale. Recent studies have shown that almost 50% of Americans carry some kind of medical debt.
Even with insurance, a medical emergency can throw a financially stable house into deep debt, thanks to sky-high co-pays, specialized care, or long-term treatment.
No one plans for an accident or an illness. And when you’re faced with a medical problem, the bills can start piling up faster than you can open them. Crippling medical debt forces many families into bankruptcy.
Worst of all, most people with medical debt that are forced to file for bankruptcy actually have health insurance. While everyone is aware of the dismal state of our country’s health care system, few people with health insurance are blissfully unaware that one serious accident or health issue can lead to crippling, lifelong debt.
If you are struggling against medical debt, you do have the option of filing for bankruptcy. The Federal bankruptcy code was created to help people struggling with overwhelming debt a second chance at financial freedom. Both Chapter 7 and Chapter 13 filings will help rid you of outstanding medical expenses, though they approach the discharge differently.
Our Aurora bankruptcy attorneys have designed this website to provide you with information about medical debt and how filing for bankruptcy with the help of an experienced Arapahoe County area debt relief lawyer can help you receive a fresh start financially. For more information, contact our firm for a no-cost case consultation. We will listen to your concerns about your debt, and offer legal service options that will produce the best possible outcome for your financial needs.
Our Aurora bankruptcy attorneys know that discharging medical debt may not be something you ever thought you would have to consider. However, you may need to declare bankruptcy as a result of debts that were not voluntary, especially after a medical emergency.
For clients that have been blindsided by severe debt caused by a health issue, there are a lot of concerns and questions associated with bankruptcy and medical debt. Many of our clients in Aurora ask the same questions during their case evaluation, which is why we have consolidated a list of the most common medical debt bankruptcy questions (and their answers) below.
Before continuing, we should warn you that even a general answer to a medical debt or bankruptcy-related question can change under specific facts and circumstances. It is important to note these answers to common bankruptcy questions are just a starting point. For specific legal advice relevant to your unique financial situation, please reach out to an experienced Aurora debt relief attorney.
Not all debts are dischargeable through bankruptcy, so one of the most commonly asked questions our CO bankruptcy lawyers receive is what types of debt filing for bankruptcy will cover.
Medical debt is unsecured debt, which can be discharged via Chapter 7 or Chapter 13 bankruptcy. Any debt related to hospital care, doctor visits, prescriptions, or other similar goods or services qualifies as medical debt.
Depending on your circumstances, there are two different types of bankruptcy that you may be able to file to eliminate your medical debt, Chapter 7 or Chapter 13 bankruptcy. During Chapter 7, debtors typically liquidate some of their property and use the proceeds to repay creditors. After debtors sell their assets to pay priority debts, any remaining unsecured debts are typically discharged, including medical debts.
Chapter 13 bankruptcy may be a better option for you if you earn a regular income that could allow you to pay off your debts over time and do not qualify for Chapter 7. Chapter 13 allows debtors to keep their assets and develop a three- to five-year plan to repay their debts.
Technically, there is no such thing as a medical bankruptcy according to the Federal Bankruptcy Code. Medical bankruptcy is a term used by bankruptcy lawyers to describe a bankruptcy that is caused by excessive medical debt. Additionally, there is no way to file bankruptcy and only list your medical debts because all debts must be included when declaring bankruptcy. Most clients who approach our Aurora bankruptcy firm for legal services have other debts that qualify for discharge via bankruptcy.
This is a tricky question that unfortunately has no universal answer and should be discussed with your Aurora bankruptcy attorney. In general, if you have an ongoing medical problem that you will continue to accrue debt for, it may be in your best interest to delay your filing until all medical treatments are complete. Once you petition the court for bankruptcy, no new debts may be added to your claim. So if you know that you’re going to have more medical debt in the near future, you may want to wait to file bankruptcy as this will help you to ensure that you are not saddled with additional debt after completing the bankruptcy process.
If, however, your debts have become unmanageable, and you find yourself unable to hold off any longer, you do have the ability to file for bankruptcy a second time in the future, if necessary. Depending on the chapter that you file under, however, you may be required to wait anywhere from 2 to 8 years before you can file again. That being said, you should not hesitate to go over all of your options with your Aurora bankruptcy attorney.
Unfortunately, yes, your paycheck can be garnished for unpaid medical debt in Colorado.
Creditors to whom you owe money can garnish your wages, including credit card companies, medical offices or hospitals, student loan lenders, and tax agencies. On the bright side, once you file for bankruptcy in Aurora, an automatic stay goes into effect which halts all wage garnishments, including those for medical debts.
If you are facing significant medical debt, there are ways to manage your financial situation. Filing for personal bankruptcy protection is certainly one of them. Contact our bankruptcy law firm in Aurora today for a personalized case consultation.
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If you’re considering filing for bankruptcy due to medical debts, having an experienced Aurora bankruptcy attorney on your side can give you peace of mind and reduce stress during this stressful time.
When you hire one of our Colorado area debt relief attorneys, we will advocate for your best interests– you won’t have to worry about making costly mistakes, losing vital assets, or preparing arguments for the courtroom. An Aurora medical debt lawyer will guide you through the process and fight for the best possible outcome for your financial future.
Every person’s financial situation is different, which is why there is no one-size-fits-all approach to bankruptcy. By talking to an attorney who understands federal and Colorado bankruptcy law, you will better understand how best to resolve your situation and get out from under the crippling debt caused by unforeseen medical bills. Contact us today for a free case consultation.