Uninsured or Underinsured and Massive Debt: Is Bankruptcy the Answer?
Not having medical insurance, or enough insurance, is the most common reason people file for bankruptcy. Even with the recent changes in medical insurance, quite often the deductibles are so high that it is impossible to pay them.
CNBC cites an analysis by NerdWallet Health. In 2013, the number of medical-related bankruptcies ranged from an estimated 14,618 cases for people aged 18 to 24 and an estimated 186,812 for those aged 35 to 44. As further cited by The New York Times in 2009, medical conditions with high out-of-pocket expenses included $34,000 for neurologic conditions, almost $27,000 for treating diabetes, and nearly $22,000 for heart disease. Further, the NY Times reports that people who had insurance still had to pay about $18,000, while uninsured patients were billed at a rate at an average of $27,000.
These are expensive costs for almost everyone. At Westbrook Law Firm, PLLC, we can help you if you have found yourself with overwhelming medical debt. It’s possible that filing bankruptcy may be the right solution, or an alternative debt relief option could be employed to solve your financial stress.
Chapter 7 or Chapter 13?
The two main bankruptcy solutions involve Chapter 7 or Chapter 13. Chapter 7 bankruptcy is commonly employed by those who have too much credit card debt, or other unsecured debts, and little to no assets. It will not discharge home mortgages, child support, student loans and recent taxes. Basically, a trustee sells off the necessary non-exempt assets you have and distributes the proceeds to your creditors. If you have assets you want to keep, such as a house, car, furniture, jewelry, etc., you may have the option of reaffirming those debts. This means you sign an agreement that you will keep up those payments, including paying any back payments that remain outstanding.
In Chapter 13, rather than liquidating assets and paying off creditors, you will restructure your finances so that you continue to pay off the debts, but in a controlled, manageable manner. You will have three to five years under a repayment plan to complete the process. At the conclusion, you will have paid off all or part of your debts, and any remaining debts will be discharged if you have been faithful to the agreement. In order to qualify for Chapter 13, you must minimally show that your income is steady and that you have some disposable income for a reorganized payment plan.
Experienced Legal Assistance for Medical Debt
The above are general outlines of how bankruptcy works. Understand, however, that bankruptcy law is complex, with many variations depending upon the individual’s specific situation. Our firm, having helped hundreds of people just like you get out from under crushing debt, can help you get back on the road to financial security. When you have been blindsided by unexpected medical costs, and your insurance is nonexistent or inadequate, your life can turn upside down quickly. Don’t risk your home, your reputation, and your future. We can give you the reassurance you need to get control of your finances. Contact us now to find out what can be done. Our initial consultation will get you started.
- CNBC: Medical Bills Are the Biggest Cause of US Bankruptcies: Study
- The New York Times: Medical Bills Cause Most Bankruptcies