With the coronavirus pandemic looming and many individuals getting sick, many are wondering “will bankruptcy eliminate medical debt if I get sick from the coronavirus?” The answer simply put is, yes. If you are having trouble paying for a large medical bill filing bankruptcy is something that you should consider.
Medical Debt in Bankruptcy
If you have medical debt and are thinking about filing bankruptcy, you should not ignore these bills. Many individuals will start by receiving late payment notices. Ignoring these can eventually lead to a medical provider suing you and getting a money judgment against you. A money judgment can lead to a wage garnishment, bank levy, or the placement of a lien on any property that you own. These can have huge impacts on your credit score and financial situation. When a creditor gets a judgment against you, they can garnish up to 10% of your gross wages. This can be a large lump sum for people who are already struggling to make ends meet.
Filing bankruptcy to get rid of medical debt can be a great way to get back on your feet. Individuals looking to file bankruptcy, have two options. They can file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. Both options can provide financial relief for people struggling to pay their debts.
Chapter 7 and medical debt
Individuals who don’t have many assets or make a lot of money can file a Chapter 7 bankruptcy to get out of medical debt. A Chapter 7 bankruptcy can be a good choice for individuals who have unsecured debt. Unsecured debts are debts like credit cards, personal loans, and medical bills. In Chapter 7 bankruptcy, individuals get a fresh start by having their debt discharged. This means that you will no longer be liable for the debt. To qualify for a chapter 7 bankruptcy, you must pass a Means Test. The Means Test takes into account your income and expenses and compares it to the median household income. If you qualify, you can file a Chapter 7 bankruptcy and have your medical debt wiped out immediately.
Chapter 13 and medical debt
If you don’t qualify for a chapter 7 bankruptcy, don’t worry. If you have a higher income or assets with more equity then you will need to file a Chapter 13 bankruptcy to get rid of your medical debt. In a Chapter 13 bankruptcy, you will pay back a portion of your medical debts in a 3-5 year repayment plan. The Court will look at your disposable income and determine what you can afford to pay back through your repayment plan. Any debt that is not paid in full throughout your plan will be discharged. This means that you will no longer have to pay the debt back.
Non-Bankruptcy Options To Get Rid Of Medical Debt
If you don’t qualify for bankruptcy or don’t want to file bankruptcy, then you may have other options. Keep in mind, that speaking with a bankruptcy lawyer first would be ideal to determine which option would be best for your financial situation. Our bankruptcy lawyers have helped many individuals get out of medical debt by filing bankruptcy. However, if you can repay most of your medical debt we can help you negotiate a settlement with your medical provider.
To begin, our bankruptcy lawyers, will review your financial situation and determine if you have the finances to make settlements with these companies. Once you have reviewed your insurance policies and have gotten all of the available coverage we can begin offering settlements to your medical providers. Many hospitals and other medical providers will settle for a portion of the debt that you owe.
If you are worried about your medical bills and need help, our New York and New Jersey bankruptcy lawyers can help you. Our New York bankruptcy lawyers practice in all five boroughs. We also serve all of New Jersey. We have helped many individuals eliminate their medical debt and start over. You can call Karra L. Kingston Esq. by calling 973-979-9078 or emailing us at karra@klkbankruptcylawyer.com