Have you ever felt burdened with a simple doctor's checkup appointment
when you have to make the co-payment that your insurance doesn't cover?
Thirty dollars here and a couple hundred there can quickly add up. However,
there are many individuals in our country who are experiencing great illnesses
and they are required to pay money that they don't have in order to
receive the treatments and procedures needed to help their aliments.
Even with the help of medical insurance, there are far too many Americans
who are struggling with debt because they cannot simply pay off their
medical bills. Inadequate health insurance coverage is not the only concern
plaguing our people, it is the fact that there are still far too many
people who have little or no coverage to help pay for the extensive medical
costs associated with their illnesses and injuries. Because of the extensive
debt that medical bills can cause people to fall into, many people are
often led to file for
bankruptcy in order to rid themselves of the financial strains of debt.
Chapter 7 is considered a debt elimination process, which means that once you file,
there is a large majority of your debt that will be completely eliminated
in order to free themselves of the bills in which they cannot pay. When
dealing with medical debt, or any other form for that matter, it is important
to recognize that not all debt is the same. In fact, there are a number
of debt categories that will determine how bankruptcy can work in your
unique situation. In the eyes of Congress, there is certain type of debt
that is considered as more important and therefore a higher priority for
repayment. Secured debt is the first category, and this has to do with
your creditor's lien on your property. If they have the power to foreclose or
repossess due to missed payments, then this is considered to be a secure debt.
The second category is called unsecured debt, and it has to do with any
debt that is not secured by some form of your property. Under this category
falls the priority debts which simply means that your filing for bankruptcy
Chapter 7 will not cancel he debt out. Non-dischargeable debt includes
student loans, domestic support obligations, and the like. And the court will require
that these be paid off regardless of the bankruptcy.
Fortunately, your medical debt is not included in this category! Non-priority
debt is generally the smallest of importance and is the last to be paid
off when a person files for bankruptcy. In most cases under your bankruptcy
filing these will be dismissed including, credit card loans, any unsecured
personal loans, and even medical debt.
When dealing with your medical debt, there is no limit to how much will
be wiped away when you file for Chapter 7 because it is considered to
be a non-priority unsecured form of debt. Even if the trustee appointed
to your bankruptcy filing is able to make the slightest of payments on
the medical debt, once the court deems your debt as being discharged,
then whatever is left on the medical debt is considered to be eliminated
through your bankruptcy filing.
Remember, in order to use bankruptcy for your medical debt in Chapter 7,
you will still have to meet the other requirements of a Chapter 7 filing.
This would include having too low of an income to pay off your debt, or
no income at all. This can be a very complicating process, so please
contact a Chicago bankruptcy lawyer you can trust at Smith Ortiz, P.C., to help determine the best course
of action for your case!