Archive for February, 2021

Chapter 13: When Trying To Settle Bankruptcy Medical Bills

February 11th, 2021

If your debts are too high but pride prevents you from seeking protection under Chapter 7 bankruptcy then Chapter 13 may be the option for you. Whereas Chapter 7 allows you to start with a clean slate, Chapter 13 is a repayment plan supervised by the court. If you fall within an income category or if you are currently unemployed, the court will also allow you to pay only a portion of the total medical debt. Most people who file Chapter 13 have incomes much higher than what Chapter 7 allows.

The repayment period under Chapter 13 bankruptcy is around 3-5 years. One advantage is you get to keep your non-exempt property, which would have been sold to pay of the creditors under Chapter 7 proceedings. People who file for Chapter 13 have something in common:

They want to pay their medical bills but their current situation does not allow them to do so.
Because of their medical bills, they are behind on mortgage or car loan payments.
You already filed for Chapter 7 bankruptcy last year or seven years ago. You can only renew application for Chapter 7 after eight years.
There are other requirements to filing Chapter 13 bankruptcy medical bills but a lawyer will be able to explain to you better the constraints and benefits of the proceeding. For example, you can’t file Chapter 13 if your debts are already discharged more than two years ago. Filing bankruptcy medical bills also does not automatically eliminates taxes, alimony, child or spousal support, student loan or criminal and civil liabilities.

It’s important that you consider all your options and reflect on the advantages and disadvantages of filing Chapter 13 or Chapter 7 bankruptcy. Don’t jump to a decision without first consulting with your family, friends, co-workers and lawyers. Remember, you will end up dealing with the consequences of your actions so no matter how valuable their advises would be, the decision of whether or not you file for bankruptcy ultimately rests with you.

Chapter 7: Protection From Bankruptcy Medical Bills

February 11th, 2021

Medical bills are the most common reason for people seeking bankruptcy. However, seeking protection from Bankruptcy medical bills is possible because hospital bills are considered as unsecured debt. A Chapter 7 bankruptcy is perfect in the sense that it is the quickest and the debtor can walk away with just a few nicks and cuts, particularly some properties that are not covered by exemption and your overall credit score, which may impact your ability to secure loans in the future.

Bankruptcy medical bills could be the best thing that you can do to restart your financial future with a clean slate. There’s a certain stigma to declaring bankruptcy but it’s actually a very personal matter. Your privacy is protected and you can still move forward with your life as opposed to the misconception that you walk away only with your clothes on. In some cases, you can even keep your car under bankruptcy.

What happens is the court designates a trustee that will inventory your properties, determine which are exempted and sell those which are not. The money raised from the sale will be used to pay your creditors. To know which properties are exempted from Chapter 7 bankruptcy, talk to a lawyer proficient with bankruptcy laws. Some examples of properties covered by exemptions are: your house, tools or equipment you use in your profession, social security, disability or unemployment benefits, or life insurance. There could be some additional exemptions depending on state laws.

After filing bankruptcy, the court orders the creditors to stay away. But the law also allows creditors to prove that they are justified in collecting your debt, the burden of proof however swings to their side. Bankruptcy however will not wipe out all your debts. Any lien you owe prior to the medical emergency stays on records and you are required to settle it in due time.

Filing for bankruptcy medical bills will not automatically exempt you from paying the IRS. There are conditions before the federal tax agency will let you off the hook. Again, consult a bankruptcy lawyer to explain to you all the gradations of law in relation to Chapter 7 bankruptcy medical bills. You might be able to ward off your creditors but you can’t get away from the IRS. Federal agents can still swoop in even after bankruptcy and seize your properties but only if they decide that you are trying to run away from your responsibility as a taxpayer.