When you’re doing your best to make ends meet, a medical emergency can turn your life upside down. Even with health insurance, an unexpected injury or illness can leave patients facing thousands or even tens of thousands of dollars in medical bills.
If you are facing a financial crisis as devastating as the medical event itself, you are likely feeling overwhelmed and unsure where to turn. However, there are legal options available that can help you regain control of your finances.
How bankruptcy can help
Your medical bills don’t just come from the health care facility. Instead, they come from multiple providers, including:
- Specialists
- Labs and imaging centers
- Rehabilitation facilities
Confusing explanations of what is being billed and what your insurance covers only adds to the stress. If you are unable to work due to your condition, lost wages make a bad situation even worse.
If you are unable to pay your medical bills, they are often sent to collections. Once that occurs, you may find yourself on the receiving end of repeated harassing phone calls.
Bankruptcy can be a powerful legal tool for people burdened by unmanageable medical debt. You have two options.
Chapter 7 vs. Chapter 13 bankruptcy
Chapter 7 bankruptcy is often referred to as the “liquidation bankruptcy.” To qualify, you need to pass a means test, which compares your household income to Connecticut’s median household income. People who have recently lost their income due to illness or disability often qualify. Much of your unsecured debt, such as medical bills and credit card debt, is wiped out. You are then required to sell a significant portion of your assets to pay off any secured loans.
Chapter 13 bankruptcy, also known as the “reorganization bankruptcy,” is for people who don’t qualify for Chapter 7 and are earning a steady paycheck. Your debts are consolidated into a three- to five-year repayment plan. At the end of the payment period, any remaining medical debt may be discharged.
Both Chapter 7 and Chapter 13 bankruptcy provide relief from harassing phone calls, lawsuits and wage garnishment.
You may feel like you’re drowning in debt, but you don’t have to go through this alone. A legal professional can show you the light at the end of the tunnel. They can review your income, assets and debts to provide you with your best options for maximum relief. They can also help you with the bankruptcy process and help ensure that your rights are protected.