Bankruptcy presents consumers with the opportunity to eliminate their debts. Chapter 13 and Chapter 7 offer the same outcome through two different routes. They both help consumers eliminate their debts based on their income and ability to settle these debts. The first step in filing for bankruptcy is determining which route the consumer qualifies for.
How to Eliminate Medical Bills
Chapter 7 bankruptcy allows consumers to sell assets and properties. A trustee collects the proceeds from these sales. They distribute the funds to the consumer’s creditors, after the exempted value is deducted. Under Chapter 7, you get rid of medical debts the same way you’d eliminate unsecured credit card bills. They are classified as unsecured debts. At the end of your Chapter 7 bankruptcy, these debts are discharged. When the cases are over, you’re no longer responsible for paying them.
Chapter 13 Bankruptcy
Chapter 13 is a structured repayment plan. It allows consumers to make monthly payments to settle their debts. In terms of medical bills, the debts are managed in the same way any other unsecured debt is. They are listed in the claim and funds are allotted for each debt. Overall, the consumer won’t pay the total cost of these debts. They will pay a settlement determined by their attorney’s negotiation.
The case takes up to 5 years to complete. At the end of the case, any unpaid balances for these bills are eliminated. This is a viable option to get rid of medical debts.
Which Option is Right for you?
Eligibility for each Chapter depends on the consumer’s income. To qualify for Chapter 13, their annual income must exceed the average income for their county. Eligibility helps determine the option that best suits you. Consumers who qualify for both chapters should assess which option presents them most benefits.
Bankruptcy offers the opportunity of eliminating unsecured debts quickly. Chapter 7 is the fastest form of bankruptcy. Consumers who want an extended plan, however, should file for Chapter 13. To learn more, consumers should contact their preferred attorney for compassionate, dedicated representation with over 100 years of combined legal experience!
