I Have One Huge Medical Debt. Is Bankruptcy The Answer?

Medical Debt

There is no question that a chapter 7 bankruptcy case will eliminate medical debt. However, if you only have one debt, you may not need to file bankruptcy at all. This is all going to depend upon the aggressiveness of the debt collector as well as your tolerance for ongoing collection efforts. In many cases, a medical provider will not pursue collecting the debt to the fullest under the law. In other words, the creditor may not actually file a lawsuit in an effort to obtain a judgment against you. They very well may continue to call you on the phone, send you letters, even contact you at work, but that does not mean that they are going to pursue a judgment. Without a judgment, the creditor is not able to garnish your wages or attached your bank account.

 Waiting To Be Sued

Depending upon the size of the debt and the particular creditor, you may want to wait and see if a lawsuit is officially filed against you. Please keep in mind that you can file a bankruptcy any time during the collection process. You can file early in the process and stop all the creditor calls and stop even the thought of a lawsuit against you. You can also decide to wait and file later if it becomes necessary. For example, if the creditor files a lawsuit and obtains a judgment against you, then your assets are at risk. If you were to file a bankruptcy at that time, you would stop all the collection efforts and the creditor would not be able to pursue enforcing the judgment. So it all comes down to your level of tolerance and whether or not you want that debt hanging over your head.

 Chapter 7 Solution

If you do decide to file for bankruptcy, typically chapter 7 bankruptcy is going to eliminate all of your medical debt and give you a fresh start. There are some debts that are not eliminated in a chapter 7. Those debts include student loans, recent taxes, parking tickets, moving violations, child support, and debts incurred by way of fraud. Provided you do not have those types of debts and provided you have not engaged in any fraudulent conduct, you should be able to eliminate most if not all of your debt under chapter 7 bankruptcy. If you visit my office, you will leave with a ton of information about how to get out of debt with my help. This is not something that you should try to do on your own. The law has gotten way too complicated and the waters are way too murky to try and navigate this endeavor alone. Obviously, each case is different. Each person’s particular situation, the amount of debt, the ability to repay or not is different. For that reason I strongly suggest that you schedule a free, initial consultation to learn your rights and obligations under the United States Bankruptcy Code. You will find that there is life after bankruptcy should you decide to file. Most clients can rebuild credit within six months to two years and they can qualify for a mortgage after two years. The key is to getting out of debt and getting back on your feet so that you can start to rebuild. Keep in mind that if you never get out of debt, then there is no rebuilding process.

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