For many people, the cost of unexpected medical procedures can quickly wipe out any savings and leave them facing an unsurmountable mountain of debt. Medical debt is one of the reasons why people often consider bankruptcy, especially when hospitals and other medical facilities are threatening to send them to collections. How useful is bankruptcy for handling medical debt? Fortunately, it can be quite helpful.
Medical Debt is Considered Unsecured
Medical debt, like credit card debt, is unsecured. This means it’s not tied to a physical asset like a mortgage or a vehicle loan is. Because of this, while you can be sued for medical debt, you cannot lose your home or other property. Most often, if a medical provider sues you and wins, your wage will be garnished until the debt is paid off. However, there are some states that do allow this type of judgment to be attached to properties. Typically, though, you will not lose your home over medical debt unless you are behind on your mortgage because of it.
Should You File for Bankruptcy on Your Medical Debt?
This is a question that is not always easy to answer. If you have more monthly debt than you can afford, bankruptcy is something you should certainly consider. If you believe it’s possible that a judgment against you could cause your real estate to become attached to your debt, you may also want to take proactive steps by filing for bankruptcy.
Other factors that you will want to keep in mind include your overall income and assets, since this determines what type of bankruptcy you can file for. You also need to consider what debt you want discharged. Is it just medical debt? If so, you will need to reaffirm debts such as your mortgage and your vehicle loans. This isn’t anything uncommon, but you do want to make certain all of the correct paperwork is filled out and filed correctly.
Do you need help determining if bankruptcy is the right choice for you? It can be difficult to fully understand how bankruptcy will affect you if you’ve never gone through the process before. That’s where the team at Michael F. Kanzer & Associates comes in. Contact us today to arrange a free consultation to talk about bankruptcy.