Are You Drowning in Medical Debt?

Our Dallas Bankruptcy Attorneys Can Help

medical billsIf you are overwhelmed by medical bills, a skilled bankruptcy and debt management attorney can help you. You may be unsure about how to correspond with medical providers and negotiate with third-party account managers. Most people do not know where to start. Allmand Law Firm, PLLC has helped thousands of clients deal with their medical debt and find a way out. Call us today at (214) 884-4020 for a free consultation of your case.

Are You Drowning in Medical Debt? Our Dallas Bankruptcy Attorneys Can Help

With the rising cost of healthcare in the United States, many individuals and families are experiencing “medical bankruptcy” because they are unable to pay off costly medical debt. If you are in a similar position, Allmand Law Firm, PLLC encourages you to get in touch with a Dallas bankruptcy lawyer from our office. We can provide you with a free consultation and help you understand your options for getting back on your feet.

Request your free bankruptcy consult today – call our office at (214) 884-4020.

Medical Debt and Bankruptcy

The average American has significant medical bills, especially after the birth of a child, an unexpected accident, or sudden medical emergency. Medical debt is a common concern, and frequent reason that people seek relief through bankruptcy. It is true that bankruptcy can help you eliminate or manage much of your medical debt.

When assessing your debts for bankruptcy, the law puts each debt into a category. Debts are either:

  1. secured
  2. nonsecured

medical billsSecured debts include personal property, such as a home or car. Nonsecured debts are often considered consumer debt, such as credit cards, and other debt that is not related to a physical item that can be sold. Medical bills are nonsecured debt.

Debts are also dischargeable or nondischargeable. Those that you can discharge through bankruptcy include consumer debts, medical bills, and any secured debts that you cannot pay for by the selling of personal property. Nondischargeable debt includes some types of tax debt and domestic debts like child support an alimony. Medical bills are dischargeable debt.

When debts are being ranked in order of importance for payment purposes, medical debt is rarely a high priority. High priority debts would include most nondischargeable debts. Some secured debts may also be higher in priority. However, since medical bills are both dischargeable and nonsecured, they do not receive priority. This means that they can be easily eliminated through bankruptcy. Medical bills are considered nonpriority unsecured debt.

Can Bankruptcy Help Me Get Rid of Medical Debt?

For some, bankruptcy is the best option for getting rid of medical debt. Because filing for bankruptcy can be a complex process, it is important for individuals to understand how each type of bankruptcy can help.

Chapter 7 Bankruptcy and Medical Bills

When you file for Chapter 7 bankruptcy, most, if not all, of your medical debt will be eliminated. If you are facing extreme medical debt, this could be the best option for you. Our attorneys can help you in this process. Visit our Chapter 7 bankruptcy page to learn more about “liquidation bankruptcy” and the means tests.

After you qualify for Chapter 7 through the means test, you will be required to list all of your medical debt and who owns that debt. In some cases, your medical bills may have been assigned to third party administrators who will manage your accounts. Those third party accounts are still considered nonsecured medical debt.

If you paid medical bills with credit cards, the bankruptcy court still considers that debt nonsecured and dischargeable. Although the debt is technically credit card debt, you can still eliminate it through Chapter 7. A bankruptcy attorney can assess your medical bills and other medical debt and help you compile necessary information for the court to discharge it so that you can move forward with life.

Chapter 13 Bankruptcy and Medical Bills

medical billsWhen you file for Chapter 13 bankruptcy, your debt can be reorganized, and you will have the opportunity to repay what you owe in smaller sums over a longer period of time. Many times, your medical bills can be partially discharged through Chapter 13. Talk to an experienced bankruptcy attorney in Dallas about this option.

If you didn’t qualify for Chapter 7 bankruptcy because of your income or you chose to develop a three- to five-year payment plan to reorganize your debts, you can still handle your medical bills through bankruptcy. You will add your medical bills, credit cards, and other debt to your payment plan. You will make payments on those debts for the duration of your payment plan. If you have an amount left over after you complete your payment plan, you may be able to discharge that amount.

The bankruptcy court still considers medical bills nonsecured and dischargeable debt in a Chapter 13 bankruptcy. Although you will include them in a payment plan, you can still discharge medical debt.

It is likely that you will pay a fraction of your medical bills through Chapter 13. The payment plan includes a compilation of all of your debt and manageable payments established by the bankruptcy court. The court them disburses the payments to each creditor. It’s unlikely that you will pay 100 percent of all of your debts through a Chapter 13 payment plan. Instead, the court may discharge medical bills and others.

Is There a Limit on How Much Medical Debt You Can Discharge?

No. There is no limit or maximum amount of medical debt that you can discharge through bankruptcy. Many Americans have tens of thousands or even hundreds of thousands in medical bills. It can be intimidating to know that you have to repay all of that debt. However, bankruptcy can give you a clean slate on your finances. You can discharge your medical bills or repay a portion and discharge the rest. A bankruptcy attorney can evaluate your specific situation and help you understand your legal options.

If you seek relief from medical bills through Chapter 13, there is no limit on how much medical debt you can discharge; however, you will have to repay a portion through your payment plan. The amount that you pay depends on your disposable income and amount of debts. Many people only pay pennies on the dollar for their medical bills through a Chapter 13 payment plan.

Discuss Your Options With Allmand Law Firm, PLLC

We understand that any medical emergency can leave families struggling with debt. In fact, you are not alone; over 62% of bankruptcies in 2007 were the result of medical debt. If you are facing constant harassment from debt collectors and feel like you are losing control because of your finances, call Allmand Law Firm, PLLC. Tens of thousands of clients have already trusted us to help them climb out of debt.

Contact Allmand Law Firm, PLLC today to schedule your first consultation. We are ready to help you regain control of your life.