Timing Bankruptcy Around an Illness

 Posted on January 07, 2025 in Bankruptcy

Medical bills are an extremely common source of insurmountable debt. No matter how responsible or good with money, anyone can find himself in this situation. You may have had a good job, good health insurance, and reasonable savings before getting sick. However, the cost of healthcare can be astronomical. Insurance may not have covered all of the care you needed, especially if you had to rely on experimental or very new treatments or if you had to go out of network to find the right specialist. It is also normal for people who are struggling with a long illness to take on other types of debt, such as credit card debt, to keep paying for essentials while they are unable to work. Fortunately, medical debt and credit card debt are both dischargeable in bankruptcy. If you are considering bankruptcy as a solution to medical debt, an experienced New Braunfels, TX bankruptcy attorney can help make sure you are filing bankruptcy at the right time.

Should I Wait to File Bankruptcy if I Still Need Care? 

If you are still battling your illness and still need extensive care, you may be wondering if you should postpone filing for bankruptcy until your condition improves. When your medical bills are still coming in, and you are still actively receiving treatment, it may not make sense to file bankruptcy right now. Bankruptcy can only help you discharge the debts you already owe - it will not protect you against future debt. If you know that you are going to need more costly treatments in the near future, it may be best to postpone filing until your course of treatment is over and all your bills have come in.

It is best to file for bankruptcy only once if you can. There is an eight-year waiting period between bankruptcies between Chapter 7 filings and four years after a Chapter 7 filing to file under Chapter 13. Any additional medical debt you take on after your initial filing cannot be discharged until you are eligible for a second bankruptcy.

Finally, going through bankruptcy can be stressful and time-consuming. You may need to appear in person or fulfill other requirements, like credit counseling. If you cannot participate due to your illness, you would need to postpone filing anyway.

Use Credit Cards Cautiously While Waiting to File Bankruptcy 

If you are planning to file bankruptcy after a course of treatment, you should be careful to use your credit card only for necessities. It is best to use your credit card only for things you need, such as food and utilities. Avoid making any luxury purchases.

Contact a New Braunfels, TX Bankruptcy Lawyer 

Law Offices of Chance M. McGhee is experienced in helping people clear their medical debt through bankruptcy. Our dedicated San Antonio, TX bankruptcy attorneys will guide you in choosing the right time to file. Contact us at 210-342-3400 for a complimentary consultation.