Even if you have “good” health insurance, you can quickly rack up enormous medical bills that gobble up the savings that you’ve spent years building. These massive hospital bills are disheartening to say the least.
And while they can be a blow to your emotional well-being, they can also be financially devastating, leaving you in a position where you have to figure out which bills you’re going to pay and whether you need to take on additional work just to make ends meet.
That’s a stressful existence, but one that millions of Americans find themselves in. So, if you’re in that position now, you’re certainly not alone. And you don’t have to continue on this path.
If you’re tired of fighting tooth and nail to claw yourself out of debt while seeing little progress, then you might want to think about your debt relief options, including bankruptcy.
Bankruptcy can help with your medical debt?
Absolutely. Most medical debt is unsecured, meaning that it isn’t backed by collateral. Therefore, if you pursue bankruptcy, then there’s a good chance that your medical debt, along with your credit card debt, which is also unsecured, will be discharged.
This can give you a new lease on life while ensuring that you still have the financial resources that you need to be stable post-bankruptcy given that you’ll be able to utilize a number of bankruptcy exemptions.
What are your next steps?
If you’re interested in wiping out your medical debt, then you’ll want to consider which bankruptcy option is best for you. In many instances, individuals who are burdened by overwhelming debt choose a Chapter 7 bankruptcy.
Chapter 7, also referred to as liquidation bankruptcy, typically requires you to give up your assets that don’t qualify for a bankruptcy exemption so that creditors can be made as whole as possible. After that point, many of your remaining debts, including your medical debts, will be discharged.
Another option is to pursue a Chapter 13 bankruptcy. Here, you enter into a repayment plan that lasts for several years. At the end of that repayment period, any qualifying and remaining debts will be discharged. This type of bankruptcy allows you to keep more of your assets, but the process does take longer to play out.
Keep in mind, too, that each bankruptcy type has its own requirements that have to be met. Therefore, if you’re interested in pursuing bankruptcy, you’ll need to make sure that you have an honest and realistic understanding of your financial picture.
Don’t try to hide the facts, as they’ll just be discovered during your bankruptcy proceeding, and any dishonesty will serve as a detriment to you.
What about credit concerns?
It’s true that your credit score will take a hit after you successfully pursue bankruptcy, and your bankruptcy will remain on your credit report for several years. However, there are strategies that you can implement to rebuild your credit score and gain access to the credit that you need.
So, while you should take these issues into consideration when thinking about whether to pursue bankruptcy, you need to weigh them in light of the fact that you can resolve them over time and your need for debt relief.