It goes without saying that your credit score will take a hit if you file for bankruptcy. The greater your credit score, the bigger the hit. On the other hand, if you are unable to pay your medical bill, it could lead to late-payment notices and even a judgment against you, which would also negatively impact your credit score. You would take the time to consider what will happen if you file for bankruptcy and weigh it against other non-bankruptcy options, both of which will be highlighted below.
Your Medical Debt in Bankruptcy
Bankruptcy may be a good option for you if you are unable to settle your debt another way. This means the creditor will pursue you for payment and your credit will take a hit regardless. Bankruptcy can help you get rid of the debt and avoid wage garnishments or other collection actions. Chapter 7 bankruptcy is a viable option if you have assets with little or no equity and do not earn a lot of money. You actually do not even need to have a lot of creditors or bad credit in order to file. In Chapter 7, medical debt will be wiped out along with other unsecured debts. In the circumstance where you are not eligible for Chapter 7, you can file under Chapter 13 bankruptcy. In this instance, you will have to pay for a portion of your medical debt through your three to five year repayment plan. When that comes to a close, the remainder will be discharged.
One non-bankruptcy option you can pursue is trying to negotiate a settlement with the medical provider. First, you need to make sure any and all insurance payment issues are resolved. If your bill was for uninsured medical costs, there is the possibility the medical provider will be willing to waive a percentage of the bill.
Another option to look into is to see if you qualify for free or reduced hospital care under the Hospital Care Assurance Program (HCAP). If you do, HCAP may cover part of or all of your expenses for medically necessary services.One last option is the Affordable Care Act (ACA), which dictates that non-profit hospitals that have federal tax-exempt status may have to take it easier on you when it comes to medical billing. These establishments have to provide free or low-cost coverage for individuals that are low-income.
Joel R. Spivack Will Help You Weigh Your Options
When it comes to figuring out what works best for your specific financial situation, you will need the expertise of an experienced bankruptcy attorney. In New Jersey, Joel R. Spivack is the attorney you want in your corner. With over 25 years of experience helping clients get back to financial stability, Mr. Spivack knows what type of bankruptcy will work best for you. He also knows that there are alternatives to bankruptcy that might work better for you. In order to have Mr. Spivack look at your financial situation, fill out the online contact form today.
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.