Facing substantial medical debt is very common in the US and may result in you considering bankruptcy in Ohio. If this is something you are considering, you will need to know if medical bills are discharged in Chapter 7 bankruptcy and, if so, how exactly this works.
Can medical debt be discharged in Chapter 7 bankruptcy? Check out this article, where we will be discussing what Chapter 7 bankruptcy includes and if you can file Chapter 7 on medical bills.
Understanding Chapter 7 Bankruptcy For Medical Bills
Medical debt is one of the most common types of debt people have in the US and is also a common debt that ends up going to collections. Many Ohio residents aren’t prepared for substantial medical debt in the case of an unexpected injury or the onset of a costly illness. Because of this, medical debt can be extremely overwhelming, resulting in the need to consider filing for bankruptcy.
During the bankruptcy proceedings, debt is categorized into three sections including:
- Priority debt: Such as taxes, alimony payments, and child support.
- Secured debt: Debt secured by physical collateral such as a property or car.
- Unsecured debt: This includes medical bills and credit card debt.
Keep in mind that when you file for bankruptcy, you will usually be expected to pay off priority and secured debt. Medical bills typically fall into non-priority unsecured debt, which means that medical debt could be forgiven entirely during the bankruptcy process.
But does Chapter 7 bankruptcy cover medical bills? Chapter 7 bankruptcy is a viable option for Ohio residents, especially if your income is below Ohio’s median income level. It typically requires that you liquidate some of your assets to repay creditors for priority and secured debts, while any remaining unsecured debt will usually be discharged.
Because medical bills are part of unsecured debt, you can claim medical bills on Chapter 7 bankruptcy if you cannot cover this. The main benefit of Chapter 7 bankruptcy is that it only prioritizes secured and priority debt, usually wiping out all unsecured debt that is left. There are also some exemptions allowed in Ohio that can help you protect some of your assets from liquidation.
The Chapter 7 bankruptcy process is also relatively straightforward and can be resolved in 4 to 6 months.
Tips For Navigating Medical Debt in Ohio
If you are wondering if medical debt can be discharged in Chapter 7 bankruptcy, you may be facing an overwhelming amount of medical bills. This is not uncommon, as medical care is very costly if you are injured or develop an illness and do not have adequate funds to cover these expenses.
However, before you consider Chapter 7 bankruptcy, there are other options you should consider when navigating medical debt.
Understand Your Insurance
Medical insurance can be very confusing, resulting in you not getting the coverage that you deserve because you do notunderstand your policy. You need to research your insurance policy and stay in touch with your insurance carrier to better understand how the bills are being paid. Sometimes, certain medical expenses should be covered by insurance, and you must stay on top of your insurance carrier to ensure they are paying these bills.
Check Medical Bills
Insurance providers are not the only companies that can make mistakes when it comes to medical debt. Medical companies may also provide inaccurate medical bills that are more expensive than they should be, or they may even charge you twice. You should always closely examine any medical bills you receive to ensure you aren’t getting duplicates and that you haven’t been incorrectly charged for something.
Use Patient Financial Assistance
The majority of hospitals and doctors’ offices provide patient assistance programs that can help you if you cannot afford to pay your medical bills. The most common financial assistance includes payment plans that allow you to pay a certain amount monthly until your bill is completely paid off. Choosing this option can provide you with a realistic monthly payment to avoid having bills go to collections.
Depending on your income, you may also qualify for other options, such as charity care or discount programs.
Avoid Using Credit Cards or Loans
As tempting as it may be to resort to loans or credit cards to pay off medical debt, this is never a good option. These payment options often come with high interest rates that could result in you paying double what you originally owed. This will only prolong their debt for most people, making it substantially harder to pay off.
Hire a Bankruptcy Attorney
If you have explored the options above and still haven’t found a solution, you may want to include medical bills in Chapter 7 bankruptcy. For situations where you are facing substantial medical debt, this can be a good option since medical bills can be included in Chapter 7.
If you decide to go this route, you need to hire a bankruptcy lawyer in Ohio to help you through the bankruptcy process. They will have substantial experience with the US bankruptcy code and Ohio laws to ensure everything is done correctly and with your situation in mind. An attorney can help you analyze your situation to determine what type of bankruptcy is best for you so that you get the best possible outcome.
Navigating whether or not medical bills can be discharged in Chapter 7 bankruptcy is also crucial, which is why an attorney will help you determine if your medical debt can be resolved through this method. They will also help you file for bankruptcy and protect you from any harassment from collection agencies or creditors.
Why You Need to Hire a Bankruptcy Attorney in Ohio
Do you think Chapter 7 bankruptcy may be a good fit for your situation? Richard P. Arthur, Attorney at Law, can help you navigate this decision to find out if it is the right fit for your debt. Richard P. Arthur has handled hundreds of bankruptcy cases in the state of Ohio and can help you come to a decision and file for Chapter 7 bankruptcy. Contact us today at 937-254-3738 for a consultation.