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Does Bankruptcy Wipe Out Medical Debt?

Medical Debt – The Leading Cause of Bankruptcy

In 2009, the American Journal of Medicine released a study about the leading cause of personal bankruptcy filings in the U.S. Not surprisingly, 62% of the study's participants stated that their bankruptcy could be attributed to unmanageable medical debt. That being said, it is important to understand that you are not alone if you are struggling to repay costly medical expenses. Whether you owe money to a hospital, doctor or medical care provider, the Michigan bankruptcy lawyer at Hensel Law Office, PLLC can help you find a debt relief solution that is right for you. There is no need to struggle with uncontrollable debt any longer when help is just a phone call away.

Will Chapter 7 bankruptcy eliminate all of 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 of time. 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. Known as "fresh start" bankruptcy, Chapter 7 is often the most practical way to rid yourself of overwhelming medical debt once and for all. If you do not qualify for this chapter, however, you should not hesitate to consider the possibility of Chapter 13.

Is medical debt discharged in Chapter 13 bankruptcy?

While Chapter 13 bankruptcy will not eliminate your unsecured debt as quickly as Chapter 7, it is still a viable option for those who are unable to get out from under their medical debt. Rather than receiving a discharge of debt within 4 to 6 months of filing, as would be the case in Chapter 7, Chapter 13 would allow you to develop a repayment plan that could 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 once the process has been concluded. Unlike Chapter 7, which requires debtors to pass a means test, Chapter 13 bankruptcy is available to all consumers who have run into financial trouble.

Should I delay bankruptcy if I will be incurring new debt?

Since you would only be able to discharge debts that have been included in your bankruptcy petition, it may be in your best interest to delay your filing if you know that you will be incurring new medical debt in the near future. This will help you to ensure that you are not saddled with additional debt after completing the bankruptcy process. If you are unable to hold off any longer, for whatever reason, it is important to note that you have the option to file for bankruptcy a second time if necessary. Depending on the chapter than 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 weigh your options before filing.

Discuss Your Case with a Michigan Bankruptcy Lawyer

Interested in eliminating your medical debt once and for all? Discuss your options with a Michigan bankruptcy attorney at Hensel Law Office, PLLC today. For this reason, you have nothing to lose by taking the first step today.

When you contact our office at (888) 258-0651, your initial consultation won't cost you a thing.

Client Testimonials

  • Sincerest thanks for all of your help in affording me what I consider a real "fresh start."

    “I wanted to give you my sincerest thanks for all of your help in affording me what I consider a real "fresh start". My divorce was unfortunate but definitely a needed change for the better. However, the financial side of things still seemed to keep that past linked, which makes this an enormous weight lifted. I just can't believe the impact it's made on my outlook with...everything.I will be sure to keep your business cards handy to distribute along with highly favorable words of recommendation should the needs arise.Thank you again for your time and professional guidance.”

    Michelle

  • Professional, competent, empathetic attorney.

    “My husband and I were forced into a position to file for Chapter 7 bankruptcy. We were devastated and mortified that we had to choose that route, but Tom eased our stress about the filing and court hearing process, as he thoroughly explained what Chapter 7 entails, as well as exactly what to expect during and after the filing process; he was accurate on each point that he advised us on. Tom also kept in frequent contact with us and responded quickly to any questions or concerns that we had while we worked with him. Tom's expertise and tact was invaluable for us, and we will absolutely recommend him to any of our friends and relatives that may find themselves in similar positions to ours. Thank you, Tom, for your dedicated help during this process.”

    EJO

  • We couldn't have gotten through this difficult process without Tom.

    “We couldn't have gotten through this difficult process without Tom. We evaluated a number of bankruptcy attorneys and found Tom to be the most knowledgeable and compassionate. He takes the time to explain all aspects of the process and answers your questions thoroughly and promptly both in person and via email. He knows the law and ensures that you receive the best treatment possible depending on your particular situation.”

    T & J

  • We have and will continue to recommend you to others in need of a fresh start.

    “Dear Tom, my husband and I wanted to express our deepest thanks for the help you gave us during our embarrassing and stressful time. I was very impressed that you returned every phone call in a timely manner. You were able to explain exactly what was going to happen in words that "we" could understand. You answered every question we threw at you. The whole bankruptcy process from start to finish was complete in the time you told us it would take. Your professionalism yet friendliness made the whole experience for us almost enjoyable... almost! We have and will continue to recommend you to others in need of a fresh start.”

    Melissa

  • His knowledge and expertise made a very difficult time in our lives much easier.

    “From start to finish our experience with Mr. Hensel was great. He carefully and thoroughly explained the entire process to us and was always available for any questions or concerns we had. His knowledge and expertise made a very difficult time in our lives much easier. We are very thankful for his help in our situation.”

    Christine and John