Filing for Bankruptcy to Address Medical Debt

 Posted on February 28, 2023 in Bankruptcy

The federal Consumer Finance Protection Bureau (CFPB) recently released alarming statistics related to the amount of medical debt that Americans are struggling to repay. In all, adults in the U.S. owed a minimum of $88 billion in medical debt as of June 2021.

The agency clarified that the actual medical debt burden plaguing American families is likely much higher, as this statistic was gleaned from analysis of consumer credit records and not all medical debt is reported to credit agencies.

If your struggle to repay medical debt is compromising your ability to repay other debts and to make ends meet, you are not alone. Thankfully, there are some debt relief opportunities available to you at this time. While filing for bankruptcy is not the only way to manage burdensome medical debt, it is worth noting that this is the primary financial obligation cited by adults in the U.S. as the reason why they have chosen to file for bankruptcy.

The Pros and Cons of Filing for Bankruptcy to Address Medical Debt

If you are only struggling to make payments to a single facility and the rest of your finances are in order, filing for bankruptcy may not be the best option for you. Instead, negotiating a debt settlement or a manageable repayment plan with the help of a lawyer may be a better option. That way, you will avoid a temporary, bankruptcy-related negative hit to your credit score and you will save time by staying out of court.

If, however, your financial situation is more complicated or you are struggling to repay multiple medical debts, filing for bankruptcy could be a great option. Medical debt is dischargeable, which means that you will be relieved of the responsibility to pay any of your existing medical debts once your case has been closed in your favor.

Additionally, being relieved of the responsibility to repay your medical debts will allow you the freedom to redirect your income to pay down secured, non-dischargeable debts and to meet your family’s basic needs. Note that while a discharge will occur within months of a successful Chapter 7 filing, it will take three-to-five years to obtain a discharge via the Chapter 13 bankruptcy process.

Contact a San Antonio Bankruptcy Lawyer

If you are not sure which debt relief opportunity would best serve your needs at this time, know that the reputable San Antonio, TX bankruptcy lawyers at Law Offices of Chance M. McGhee are available to clarify your concerns and provide you with objective, personalized answers to your questions. We offer free, confidential legal consultations for exactly this reason.

We believe that everyone, regardless of their financial circumstances, should understand both what their options are and the potential positive and negative consequences of each opportunity. You can schedule your free case evaluation appointment today by filling out a contact interest form on our website or by calling us at 210-342-3400. We look forward to meeting with you.   

Source:

https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf