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Sometimes it’s a catastrophic illness necessitating a lengthy hospital stay. Other times, it can be medical procedures or rehabilitation therapy performed without insurance. Unexpected injuries and long illnesses can easily bury good people in medical bills. Many people burdened with crippling medical debt actually have health insurance, but are unable to pay the deductibles, co-pays, out-of-network charges, etc.
Even if you have health insurance, one serious illness or accident can get you in over your head financially. The stress that accompanies unpaid hospital bills often results in feelings of hopelessness and despair. From Denver County to Yuma County and everywhere in between, overwhelming medical debt is one of the main reasons why Coloradans file for personal bankruptcy.
Few Americans would argue that the medical care industry is in serious need of an overhaul. One accident or illness can drain a family’s life savings and incur crippling debt. When you’re unable to pay, doctors and hospitals often send your debt to a collection agency, making matters exponentially worse. Debt collection agencies don’t care whether you’re recovering from illness, bedridden, or unable to work – they will harass you and your family until the stress and anxiety seem insurmountable.
Just because your medical debt resulted from circumstances beyond your control, does not mean that you cannot now take charge and effectively deal with it. A bankruptcy filing is frequently the answer to this frustrating problem.
If you’re interested in exploring the idea of filing for bankruptcy and all other issues relating to your overwhelming medical debt, you should contact our experienced CO bankruptcy lawyers and schedule a free case consultation so that we can evaluate your situation.
Most people who file for bankruptcy due to excessive medical debt are not the deadbeats the credit industry attempts to make them out to be. The last problem a recovering patient needs is the stress of trying to figure out how they’re going to pay for continued treatment.
The primary goal of our Denver County bankruptcy attorneys is to make filing Chapter 7 or Chapter 13 bankruptcy as easy on you as possible. To that end, we have compiled a list of frequently asked questions on bankruptcy with regard to medical bills and medical debt.
The answers you find here serve as a good jumping-off point in gathering the information that you need to have some basic knowledge about bankruptcy and medical debt, but nothing can take the place of getting first-hand information about your specific case from an experienced Denver bankruptcy attorney. If you are considering bankruptcy as a solution, contact our firm to get in-depth answers to all your bankruptcy questions.
What is considered medical debt in the State of Colorado?
Medical debt is a debt you owe for medical services. This includes hospital care, doctor visits, prescriptions, or other similar goods or services. Medical debt can be incurred whether you’re insured or not because even if you have health insurance, it may not cover all costs for medical services, including copays or extensive hospital stays.
Can I file for bankruptcy in Denver if I only have medical debt?
There is no such thing as a “medical bankruptcy,” or a bankruptcy limited to just resolving medical debt. However, you may still be able to have your medical debts discharged in either a Chapter 7 or Chapter 13 bankruptcy filing. Filing for Chapter 7 or Chapter 13 doesn’t come with a pick-and-choose debt option, which means that you cannot limit a bankruptcy filing to deal only with your medical debts. When you file for bankruptcy, all your debts must be included in the bankruptcy documents filed in your case.
Is medical debt considered secure or unsecured debt?
Medical bills are known as “unsecured” debts, meaning you did not have to put up any collateral when you incurred the debt. Essentially, medical bills are a service debt – costs and expenses accrued as a result of undergoing treatment for a disease, procedures to correct health problems, or administrative fees attached to medical care. Other common unsecured debts that bankruptcy can discharge include credit card bills and personal loans.
Will Chapter 7 bankruptcy eliminate my medical debt?
If you have acquired a significant amount of medical debt, it may be in your best interest to file for Chapter 7 bankruptcy—as this process would allow you to discharge most, if not all, of your unsecured debt over a short period. Once you have liquidated your non-exempt assets and used the proceeds to repay your creditors, the court will order a discharge of all remaining debts. This, in turn, would free you of the legal obligation to repay them.
Is medical debt discharged in Chapter 13 bankruptcy?
While Chapter 13 bankruptcy doesn’t eliminate your unsecured debt as quickly as Chapter 7, it is still a viable option if you have a mountain of medical debt but don’t qualify for Chapter 7 bankruptcy.
Often referred to as a “reorganization bankruptcy” or a “wage-earners bankruptcy,” Chapter 13 bankruptcy allows you to develop a debt repayment plan that would be executed over 3 to 5 years. As long as you follow the decided guidelines of your bankruptcy plan, you should be able to receive a discharge of all remaining debts, including medical bills, once the process has been concluded.
Will filing for bankruptcy in Colorado affect disability benefits?
In general, Social Security Disability and VA Disability are protected under federal law. Thanks to Denver’s generous bankruptcy exemptions, any claim for public or private disability benefits is now protected up to $5,000 per month.
However, if you’re looking for a more specific answer, please contact an experienced Denver County bankruptcy attorney, as protection may depend on the type of disability benefits that you are receiving.
Can my paycheck be garnished for medical debt?
Unfortunately, yes, your paycheck can be garnished for unpaid medical debts in Denver, Colorado and everywhere else you may choose to live in the United States. Creditors to whom you owe money can garnish your wages, including credit card companies, unpaid medical bills, child support, student loans, and tax agencies.
The good news is, once you file for bankruptcy in Colorado, an automatic stay goes into effect, halting all wage garnishments, including those for medical debts.
When you cannot afford to pay your medical bills, you can find debt relief through bankruptcy. No matter your situation or the type of debt, our Denver bankruptcy attorneys are here to help. During your free case evaluation, one of our team will go over all of your options and help you devise a strategy that meets your debt relief needs now and into the future.
The anxiety and stress associated with mounting medical and hospital bills can take their toll at a time when your health problems make you particularly vulnerable. While there are times when a person’s health should take priority over virtually all other affairs, debt incurred as a result of addressing medical concerns can lead one to a financial graveyard.
Regardless of how complicated your situation may seem, it is important to not give up hope. If you are one of the thousands of Denver residents who are drowning under the weight of medical bills, it is important that you work with our team of Denver bankruptcy attorneys.
Our firm understands that medical care is a necessity of life and situations such as emergencies, hospital stays, and ambulance rides can all quickly add up. If you are suffering because of steep medical bills, contact our Denver debt relief attorneys today for a no-cost case consultation.