Philadelphia Medical Debt Bankruptcy Lawyer
A common reason that people seek bankruptcy relief is medical debt or loss of income due to injury or illness. This is not at all surprising, considering that in 2016, a reported 17% of uninsured Americans and 31% of insured Americans took money out of college, retirement, or other long-term savings in order to pay medical bills. Additionally, about 17% of insured and 11% of uninsured had to take out another type of loan in order to pay for medical expenses. As healthcare costs continue to rise, many individuals and families find themselves struggling to make ends meet while paying back hospital, dental, or doctor bills.
Even insured individuals can find themselves owing tens of thousands of dollars in medical debt. In these cases, sometimes the best option is to file for bankruptcy so that medical debts may be wiped out or reduced. Filing for Chapter 7 or Chapter 13 bankruptcy may help you satisfy medical debt you cannot repay, giving you a head start on debt relief. If you or a loved one is struggling financially because of medical expenses owed, filing for bankruptcy in Pennsylvania with the assistance of an experienced Philadelphia bankruptcy attorney may be the best option for you. To learn more in a free bankruptcy consultation, contact Sadek and Cooper Law Offices, LLC at (215) 995-2543 today.
What Happens to Debt When You File Bankruptcy in PA?
If you have racked up a significant amount of debt that cannot be paid back right away and is continuing to accumulate interest, bankruptcy is often the best option. As soon as you file for bankruptcy, an “automatic stay” is enacted which freezes debt collection activities. The automatic stay buys time by freezing creditors’ collection actions. It also gives you, the debtor, more time to create a financial plan that will allow you to pay off your debt.
Furthermore, filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy also gives debtors the opportunity to have debt, such as medical bills, partially or completely discharged. Once a debt is discharged, an individual is no longer obligated to repay it.
Each type of debt is treated differently in bankruptcy, with some debt having the option of being discharged, and some without that same option. Debts that are non-dischargeable, which debtors will always be held responsible for, include alimony payments, child support payments, most tax debts, and criminal fines.
Can Filing Bankruptcy Get Rid of Medical Bills?
Medical debt is dischargeable, meaning it can be reduced or wiped out in Chapter 7 bankruptcy or Chapter 13 bankruptcy. Other examples of dischargeable debt include credit cards, utility bills, personal loans, business debt, rent payments that are past due, and Social Security overpayments.
If you are filing for bankruptcy with the hopes of totally or partially discharging your medical debt, it is important to know which type of bankruptcy will be most effective for you. For example, if you file for Chapter 7 bankruptcy, you will most likely be able to discharge all of your medical bills that are owed in addition to your other general unsecured debts.
If you file for Chapter 13 bankruptcy, the court will place you on a repayment (“reorganization”) plan that can last anywhere from three to five years. Within the terms of this plan, unsecured creditors must be paid the amount of money they would have received if the debtor filed for Chapter 7 bankruptcy. Thus, the amount of medical debt discharged in a Chapter 13 bankruptcy filing will depend on the specific facts of each case. In some cases, debtors will not pay any money toward their medical debts, while in others, a debtor will pay the bulk of the debt.
The type of bankruptcy that you will file for is based predominantly on your income. If you pass the bankruptcy “means test,” meaning that your current monthly income is less than the median income for a household of your size in your state, you may file for Chapter 7 bankruptcy. If your total disposable income exceeds a certain amount, you cannot file for Chapter 7 bankruptcy and therefore your only option is to file for Chapter 13 bankruptcy.
Philadelphia Bankruptcy Attorneys for Medical Debt Relief
If you are considering filing for bankruptcy in Philadelphia with the intent to discharge your medical debt, it is imperative that you speak with an experienced attorney so that you fully understand what your best options are. Sadek and Cooper Law Offices, LLC handles bankruptcy cases in Philadelphia, Bucks County, Delaware County, Montgomery County, and the Southeastern Pennsylvania area. To learn more about how you can discharge your medical debt by filing for Chapter 7 or Chapter 13 bankruptcy, call the Philadelphia bankruptcy lawyers of Sadek and Cooper Law Offices, LLC at (215) 995-2543 for a free and confidential legal consultation.