Medical Debt

If you live in Knoxville and are a victim of overwhelming medical debt. Some form of Bankruptcy may be your best solution. We can help.

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Medical Debt & Bankruptcy

If you are struggling to make ends meet because of overwhelming medical debt, you are not alone. Many of our clients come to us because of sky rocketing medical debt. We can help.

Medical debt and bankruptcy are not subjects that many people want to talk about, but it is important to know the facts. The problem of medical debt has been on the rise for years now, with more than one-quarter of adults with health insurance reporting problems paying their medical bills. Medical debt can lead to financial issues like credit card delinquency and bankruptcies. We’ll take a look at some statistics, as well as some strategies for how you can avoid this situation in your life!

Medical debt can also lead to serious life issues, from credit card delinquency to bankruptcy. Medical bills are the leading cause of personal bankruptcies in both the United States and Canada. The problem is only getting worse with time as well; about a quarter of adults with health insurance reported having problems paying their medical bills over the past year! This number has been steadily increasing for years, so now, more than one-quarter of people have experienced some form of financial aftermath due to medical expenses.

Medical Debt

Medical Debt & Bankruptcy

Can I Eliminate Medical Bills in Bankruptcy?

Yes, you can wipe out (discharge) medical debt in bankruptcy. Unpaid medical bills are the most common reason people seek relief with a type of court case called “bankruptcy.” But before deciding whether it’s right for you to file bankruptcy, you will want to consider several factors such as how much money is left after paying for basic needs like food and housing costs. This includes:

Should You Use Bankruptcy to Eliminate Medical Bills?

In many cases, bankruptcy is the best way to get your medical debts erased by a court’s order.

In some instances, it may be wise for people who are worried about their debt and have too much of it to resort to filing bankruptcy in an attempt at wiping out that debt. Bankruptcy can also help with credit card bills so individuals should research what will work for them before making any rash decisions on how they want this process handled from start-to-finish.

Do You Have Debts Other Than Medical Bills to Eliminate in Bankruptcy?

Medical Debt is not the only debt you can eliminate with bankruptcy.

If you have medical debt and you are considering filing for bankruptcy, know that it’s okay only to wipe out some of the bills. However, if you can get rid of other debts simultaneously (credit cards, student loans), this might make your decision a lot easier since getting rid of more than one bill will be beneficial both now and in the future! These include:

  • Unsecured Credit Card Debt
  • Payday/Cash Advances
  • Personal Loans
  • Past and Current Utility Bills
  • Back Rent or Lease Payments
  • Car Repossession Deficiencies
  • Foreclosure Deficiencies
  • Gym and Other Memberships
  • Car Loans Surrendered in Bankruptcy

Not all obligations or debts can be discharged in bankruptcy, however. For instance, you’ll remain responsible for the nondischargeable debt, like Child Support, Alimony, and recent Income Tax Debt. Most Student Loans are not discharged, except under minimal circumstances.

Chapter 7 and Medical Debt

Chapter 7 bankruptcy is a great option if you are interested in erasing your medical debt, but it does have some caveats. If you qualify for Chapter 7 (which includes having low enough income), the process can be completed within anywhere from 3-6 months, depending on how quickly and efficiently paperwork is processed by the court system.

Chapter 13 and Medical Debt

You must qualify for Chapter 13 as well. You must maintain enough income to pay the required amounts and your medical bills through your three-year Chapter 13 repayment plan. However, other debts cannot exceed a specified limit for you to be eligible under this type of bankruptcy protection.

You’ll start by separating your debts into two categories—priority and non-priority unsecured debt. Debts such as domestic support obligations, recent overdue taxes, arrearages of any mortgage or auto loan you may have taken out if a house or car respectively that need to be paid off in full before the property will remain yours which are given priority treatment because they must be repaid first.

Most other debts, such as medical bills and credit card balances are lumped into the same category. Each creditor gets a pro-rata portion of what remains after higher priority creditors get their cut in money from your account.

There are many factors that will lead to the decision to file for bankruptcy or not. The best advice is to consult a competent, qualified attorney that specializes in bankruptcy and financial matters. Especially if your medical debts have been turned over to a collection company. 

In Knoxville, the largest medical collections company is Wakefield & Associates. In fact, Wakefield & Associates account for more than half of all lawsuits filed in Knoxville. Other medical debt collectors in Knoxville include Optima Recovery, FAST, Healthcare Receivables Group and RMB, Inc. 

At Cindy Lawson & Associates, P.C., we have helped more than 26,000 people find freedom from debts. That is also why we always offer a free, no-obligation consultation with our experienced attorney.  You will meet one-on-one, either in-person or telephonically from the comfort and safety of our home and office.  Please contact us at (865) 938-0733, so that we can help you.

Get a Fresh Start!

We want to help you get your life back. We offer free consultations and the ability to file your bankruptcy online. We can meet remotely or in person. The choice is up to you.

Speak directly with an attorney:

+1 (865) 938-0733

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