Chapter 7 Bankruptcy and Medical Debt

NJ Bankruptcy Attorney Assists Those with Medical Dept File for Chapter 7 BankruptcyOne of the biggest ways people end up accruing debt ends up being a combination of inadequate health insurance coverage and the constantly increasing cost of healthcare. People find it difficult to meet the financial demands and high costs associated with treatments, surgeries, medications, etc., leaving them facing considerable medical debt.

Despite this ever growing problem, there is a bit of a silver lining. Many people have found they can eliminate their medical debts through filing for Chapter 7 bankruptcy.

Chapter 7 bankruptcy is the simplest and most common form of bankruptcy. It does not involve a plan of repayment like Chapter 13 bankruptcy does. Instead, it involves the bankruptcy trustee gathering and selling your nonexempt assets and using those proceeds to pay back creditors or those you owe money to.

What makes Chapter 7 bankruptcy a viable option for those facing medical debt is the fact that medical debt is considered a non-priority general unsecured debt. This means it is the last to get paid under Chapter 7 bankruptcy and most non-priority general unsecured debts end up discharged without any repayment.

So basically, if the bankruptcy trustee is able to make any payments to your creditors your medical debts will not receive priority. In addition, if they are able to pay a portion of your medical debt through bankruptcy, whatever is left over will be wiped out when you receive your discharge.

One other benefit to Chapter 7 bankruptcy is the fact there is no limit or cap on how much medical debt can be discharged. When it comes down to it, all you have to do is be able to qualify for a Chapter 7 bankruptcy, which would mean your income must be low enough to pass a disposable income means tests and you do not have a lot of assets you cannot exempt.
In order to be sure that Chapter 7 bankruptcy is the best route for you and your medical debt is by hiring an experienced bankruptcy attorney. In New Jersey, the Law Office of Joel R. Spivack is specifically dedicated to all legal matters relating to bankruptcy.

If you are considering Chapter 7 bankruptcy then you should contact us today for a free consultation. The Law Office of Joel R. Spivack Esq. can be reached at 856-488-1200.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.

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