Did you know that the biggest reason people file for bankruptcy is medical debt?
In 2013, CNBC reported that bankruptcies resulting from unpaid medical bills totaled nearly 2 million, making health care debt the number one reason why people file for bankruptcy. This outpaced bankruptcies filed due to credit card debt and potential property foreclosures.
The news outlet analyzed data from the U.S. Census, Centers for Disease Control, the federal court system and the Commonwealth Fund to come up with the findings. The bankruptcy filings did not include only the uninsured—according to the news outlet, about 10 million Americans with health insurance had medical debt that year.
Additionally, CNBC reported that many people used their credit cards to pay off medical debts, reaching their maximum credit line balances before filing for bankruptcy.
Bankruptcy and Medical Debt. What Do I Need to Know?
One tremendous benefit of Chapter 7 or Chapter 13 bankruptcy is that both filings initiate an automatic stay that that prevents collection attempts, if you have outstanding medical debt.
Additionally, when you file for Chapter 7 bankruptcy, if you qualify, you can discharge medical bills because of their unsecured nature. If you do not qualify for a Chapter 7 bankruptcy, you may be able to file for Chapter 13 bankruptcy, in which you can greatly reduce medical debt through a payment plan.
As the data above shows, if medical bills are overwhelming you, you should talk to our Lewisville bankruptcy lawyers. Medical debt is treated as a non-priority debt during all bankruptcy cases, meaning you can eliminate it or greatly reduce the amount you will pay.
To discuss your medical debt with our Lewisville bankruptcy lawyers, you can use the contact request form on this page or call the number listed above.
We are dedicated to helping clients overcome financial obstacles including overwhelming medical debt, credit card debt and mortgage complications.
Shuster Law Firm PLLC – Lewisville Bankruptcy Attorneys