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Medical Debt and Bankruptcy

Medical Debt and Bankruptcy

Two of the most common types of debt include secured and unsecured. Secured debts, like car and home loans, are tied to collateral that can be repossessed if you fail to make a payment. Unsecured debts, like credit cards and payday loans, are not tied to collateral or assets; making them much easier to resolve in bankruptcy. Thankfully, medical debts fall into the unsecured debt category.

Is medical debt dischargeable through bankruptcy?

Yes, it is. If you file for a Chapter 7 bankruptcy, the medical debt is probably completely dischargeable no matter what the amount is. If bankruptcy leads to discharge, one is not bound by an obligation to pay back any of the medical bills incurred and not paid for by the insurance coverage. The specific debt must be listed when filing a bankruptcy petition. In Chapter 13, the medical debt will be lumped in with the rest of one's unsecured debt, and creditors will receive a pro-rata portion of one's payments toward unsecured debt in the Chapter 13 plan.

What relief is available to me through bankruptcy?

The Chapter 13 trustee will receive payments over three to five years following a plan confirmation by Chapter 13 bankruptcy filers. The trustee will disburse all payments amongst a debtor’s creditors in the order of priority. The general unsecured creditors will remain at the bottom of the priority list. Per debt relief rules, secured creditors are paid on a monthly basis in order to maintain the collateral of the loan. The healthcare costs or medical debt related to medical care will be in the last category of debts paid. While student loans are regarded as unsecured debts they are usually non-dischargeable through bankruptcy unless the debtor can demonstrate convincingly that he or she has an undue hardship.

There is a vital difference between Chapter 7 and Chapter 13 bankruptcy filers

Chapter 7 filers will receive the maximum discharge of eligible debts but sometimes their assets are sold to satisfy some of the debt. On the other hand, Chapter 13 candidates will repay some of their debts before receiving a discharge, but they are allowed to keep all of their assets without the risk of sale.

If you would like more information about your medical bills or other debt, contact a Citrus Heights bankruptcy attorney to discuss your options.

Money Management and Bankruptcy

Money Management and Bankruptcy

It might seem that there is a direct connection between money management and bankruptcy. Money management skills are not always about being prepared or staying alert about your money. However, the financial burden is often unexpected and more complicated than it appears. Filing for bankruptcy can be a solid plan for debt relief when the financial burden becomes unbearable. 

Bankruptcy as a Method of Money Recover

If you are stuck with a lot of debt, it might not seem that there are good strategies to get out of debt. For many people in those circumstances, bankruptcy may come to the rescue. Bankruptcy law exists as a path to financial freedom.

Chapter 7 or Chapter 13 Bankruptcy

You can file for personal bankruptcy under Chapter 7 or Chapter 13 and expect to get your unsecured debts resolved. Depending on your circumstances, bankruptcy can eliminate your debt and protect your assets. For example, it is commonly known that preventing foreclosure is not easy. However, you can avoid foreclosure with a Chapter 13 bankruptcy filing.

It would be best if you always aimed to take advantage of the provisions of the bankruptcy code whenever there is a requirement on a burgeoning debt. Bankruptcy should still be considered as a convenient tool in your arsenal of money management techniques. 

If you have unbearable debt and would like more information on how to get a fresh financial start, contact a Sacramento bankruptcy attorney today.

Wage Garnishment and Bankruptcy

Wage Garnishment and Bankruptcy

Wage garnishment is a court-ordered procedure in which the court directs your employer to send a part of your earnings to a person or an organization you owe money to. This process of wage garnishment usually stays until the debt you owe is fully cleared.

Wage garnishment orders are generally exercised on debts like child support payments, taxes, and student loans. It is also applicable to all other obligations that have been ordered by a court to be paid, resulting in a collections lawsuit.

Wage garnishment orders can be made on all such persons who receive personal earnings from their employers. Personal earnings could include wages, commissions, salaries, bonuses, and any income from retirement plans.

How Bankruptcy Stops a Garnishment: The Automatic Stay

A bankruptcy filing can help you stop a garnishment order. When you file for bankruptcy under Chapter 7 or Chapter 13, a bankruptcy court ordered automatic stay comes into effect. In simple terms, this automatic stay will hold all such actions taken against you as part of a garnishment order. The stay will also stop creditors from collecting debts from you. It can also remove all of your underlying debts.

The automatic stay provision of a bankruptcy filing is a very advantageous aid, but it must be used carefully. The automatic stay only lasts for about 30 days or might not be ordered at all if you file for bankruptcy repeatedly.

While filing for bankruptcy to stop a garnishment order, you should take note that the benefits provided by a Chapter 7 filing and a Chapter 13 filing may be different. For example, a Chapter 7 filing will not facilitate an automatic stay on a garnishment order for alimony while a Chapter 13 filing will.

By contacting an Elk Grove bankruptcy attorney, you can stop the wage garnishments and eliminate all of your qualifying debt.

Debt Relief and Bankruptcy

Debt Relief and Bankruptcy

If you feel there is no hope of paying back your unsecured debt, like credit cards, medical bills, or personal loans during the next five years, you may want to find ways to get debt relief.

Debt relief through bankruptcy

A good strategy is to talk with a bankruptcy lawyer before proceeding to any debt relief plans. In general, the initial consultation is free, and then if things didn't work, you could choose another option.

The most common form of personal bankruptcy is Chapter 7 liquidation. This type of bankruptcy may relieve you from paying your credit card debt, unsecured personal loans, and medical debt. This path can take from four to six months to eliminate your eligible unsecured debt.

Relief Through Debt Management Plans

Through this option, you can fully pay your unsecured debts, typically credit cards, with a lower interest rate or without fees. Each month you make one payment to a debt relief agency that disperses the funds between your creditors. Both credit counselors and credit card companies maintain long-term agreements to help debt management clients.

Some of these plans require a small processing fee every month, plus some upfront set up fees. If you fail to keep up with the payments you will still owe all of your debt. Generally, your credit card accounts will be closed, and as a result, you need to live without credit cards until you complete the entire plan.

Relief Through Debt Settlement

Debt settlement companies may ask you to pause paying your creditors, as an alternative the money is placed in an account where the debt agency can control it. Every creditor is contacted and informed that your money is gathering in your account to pay your debt. This often causes you to fall more behind on your payments. The reality of potential getting nothing encourages the creditors to agree on a lower offer. Sometimes the creditors get tired of waiting and will sue you for the balance of your debt anyways.

Contacting a Roseville bankruptcy attorney will give you the answers you need to see if bankruptcy is a good option for you to get financial relief.

Tips for Paying on Your Chapter 13 Bankruptcy

Tips for Paying on Your Chapter 13 Bankruptcy

If you fell behind in your secured debt and the bankruptcy court approved a payment plan for you. You may be wondering how you can live so frugally during the three to five years you will be paying the court toward your past debt. Filing bankruptcy can provide you with a fresh financial start, and save you from collection calls or lawsuits.

Besides losing your job, or unexpectedly large bills, one reason for going bankrupt is spending habits and a lack of proper saving measures. A lifestyle change with minimal spending might help you get through the next few years on a tight budget on your Chapter 13 plan.

Here are some tips to help you during your Chapter 13 repayment plan:

∙ Cutting off your credit card usage can help. When you pay cash for your expenses, you tend to stay in control of your spending.
∙ One of your most substantial expenses is probably your mortgage or rent. Moving to a smaller place can make a huge difference to your budget.
∙ Switching to an older reliable vehicle will save money on car payments. If you have an extra vehicle that you mainly use for recreation, try selling it.
∙ Workout at home to save money on a gym membership.
∙ Avoid dining out and instead, cook at home more often. Cutting down on alcohol can also save you money.

One very effective way to never go bankrupt again is to have an emergency fund. Once you are back on your feet, attempt to save money and cut expenses.

If you are overwhelmed in debt and considering bankruptcy, contact a Folsom bankruptcy attorney to find out how you can get financial relief.

Utility Shut-Offs and Bankruptcy

Utility Shut-Offs and Bankruptcy

If you find yourself struggling with your debt due to a job loss, being underemployed, or illness, you may find that you have fallen behind on your utility bills. If you are worried that your lights or your water are about to be shut off, contact a bankruptcy attorney to stop the actions against you.

Automatic Stay

One of the benefits of filing bankruptcy is that it puts an immediate stop to bill collectors due to the automatic stay. All actions will stop, such as vehicle repossessions, foreclosures, phone calls, letters, and utilities shut off. The automatic stay also temporarily stops all lawsuits against you by creditors.

20 Days

Chapter 7 bankruptcy can stop utility shut off for up to 20 days. Within that time, the debtor can either pay the remaining balance on the bill or stop services and have the bill wiped away in bankruptcy. When you have received a cut off notice, and you just don't have the money to pay it, sometimes contacting your utility provider can get you some more time. Several low-income energy assistance programs can help you with your monthly utility bill if you qualify. By contacting your local Health and Human Services organizations, you can usually find some agencies to help you.

If you have more debt problems than just utility bills and you don't know how you are going to pay them, contact a Roseville bankruptcy attorney today.