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When someone suffers illness or injury that requires extensive medical attention, medical debt is often an additional layer of stress that follows their treatment. An Athens medical debt lawyer can clarify how bankruptcy might resolve eligible medical debt and how filing Chapter 7 or Chapter 13 could impact your remaining financial responsibilities.
Athens residents and people throughout McMinn County can learn more about available bankruptcy options to help decide if filing for bankruptcy is a good option for them.
Our firm‘s exclusive focus on bankruptcy means that Mark T. Young & Associates can effectively assist individuals and small businesses with navigating Chapter 7 and Chapter 13 options. It’s not uncommon for medical debt to come alongside other forms of debt, such as credit card debt and personal loan debt. Therefore, our firm looks at your medical debt holistically rather than treating it as an isolated issue.
When debt feels unmanageable, Mark T. Young & Associates can help you understand medical debt laws and seek a favorable solution for you and your financial future.
Even when someone has medical insurance, medical debt can still accumulate for various reasons. If someone needs extensive medical care, insurance pays their share, but the following costs can still pile up:
Additionally, if someone experiences a significant medical event, they may also suffer from lost wages, as they will likely have to take time off from work to recover. When medical costs pile up, it can be tough to keep up with payments for everyday expenses. If debts for medical care in Athens and McMinn County aren’t settled, individuals could face debt collection efforts or even legal action.
In bankruptcy proceedings, medical debt typically falls under the category of unsecured debt, since it’s generally not backed by any collateral a lender could seize if payments aren’t made. Consequently, medical expenses tend to be viewed differently than debts tied to property, such as home loans or car financing.
Ultimately, what makes a debt dischargeable is a combination of the Bankruptcy Code’s provisions and the individual facts of the case. If you do choose to file for bankruptcy in Athens, you will generally file in one of four different Bankruptcy Courts, which are located in Knoxville, Greeneville, Chattanooga, and Winchester.
In the US, medical debt is a major financial problem, especially in the South. As of 2024, 15 million Americans had medical bills on their credit reports, totaling over $49 billion in unpaid medical bills, according to the Consumer Financial Protection Bureau. The CFPB discovered that Southerners had higher average medical collection amounts and were more likely to have medical bills on their credit records.
In a Chapter 7 bankruptcy, applicable assets are liquidated, and eligible debts are discharged. Many people who go through Chapter 7 bankruptcy can keep their belongings by using available exemptions, but these exemptions and the rules for qualifying differ and need to be examined based on the specifics of each unique situation.
Qualifying medical debt may generally be discharged in a Chapter 7 bankruptcy. Chapter 7 can provide a means of addressing these financial responsibilities without having to repay the full balances.
Qualifying for Chapter 7 may be dependent upon household income and other financial information. One aspect of determining whether or not someone qualifies for Chapter 7 protection is the means test. An Athens medical debt attorney can go over your finances and figure out if Chapter 7 is a valid legal option for your situation.
Chapter 13 bankruptcy uses a court-approved repayment plan in place of the liquidation process applicable to Chapter 7. For those with consistent income, Chapter 13 often presents a solution for paying off a portion or the entirety of their debts over time. The duration of the repayment plan is between three and five years, and is determined based on the debtor’s income.
Typically, medical debt gets handled as unsecured debt within a Chapter 13 arrangement. In some medical debt cases, creditors might only recover a fraction of the money they’re owed, depending on the debtor’s financial situation. Following the debtor’s successful fulfillment of the necessary criteria and the granting of a discharge, remaining eligible debts can be eliminated.
Chapter 13 bankruptcy may be an option for those who don’t meet the qualifications for Chapter 7. Chapter 13 also offers protections that come with a payment plan that some may find favorable. The process also allows for a consolidated approach to various debts, rather than facing each medical bill separately.
If your medical bill has already gone to collections, you should not ignore it. Make sure to verify the amount owed, pinpoint who the original bill was from, and hold onto all your letters and account statements. If you receive a call from a collector, you may have rights under federal debt-collection law regarding the collection activity. A bankruptcy attorney can help determine whether the collection account can be included in a bankruptcy case.
A medical bill may not necessarily affect your spouse if the bill is only in your name. Whether a creditor or debt collector is able to go after your spouse or not depends on the specifics of your case and who is legally responsible for the bill. Just because you’re married doesn’t automatically mean every debt becomes a shared responsibility. The individual parties’ debts should be identified when considering bankruptcy.
If you think there is an error on your medical bill, begin by requesting a detailed list of services and their costs from your medical provider and compare it with your insurance records. You can call your provider to discuss any charges that you think are incorrect. Contact your insurer to discuss any charges that you wish to dispute. You can also contact your lawyer to discuss any disputed charges and verify their validity.
Generally, no, you cannot include future medical bills in a bankruptcy case. Bankruptcy covers current medical debts in bankruptcy. Any debts or obligations incurred after the bankruptcy petition has been filed are likely going to require individual assessment. Should you anticipate needing more medical treatment, discuss the projected expenses with your lawyer while evaluating your finances prior to filing for bankruptcy.
If you have incurred significant medical debt and need to hire a medical debt lawyer, Mark T. Young & Associates can help you discover what options may be available to you for relief. Contact our offices today for a consultation.
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