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Health care costs have been rising exponentially over the course of several years.
Beginning with the introduction of the healthcare marketplace, benefits from employers began to decrease as covering premiums for employees rose impacting the bottom line of many companies.
As a result, you have taken on increased medical expenses even for routine appointments making affording preventative healthcare as well as reactive healthcare back-breaking for your bank account.
You might be considering bankruptcy but don’t know where to start or if this will impact the care you receive from your current providers. The good news is, it is not unheard of to file bankruptcy due to medical bills. About 60% of all bankruptcy claims include medical bills or have such listed on the petition.
What kind of bankruptcy can I file?
At the end of the day, bankruptcy is bankruptcy. There is no special kind you can seek out to discharge this kind or that kind of debt. Something to consider when you move towards filing is that bankruptcy clears all unsecured debt (e.g. credit cards, utility bills, friends and family loans, etc.)
Filing for bankruptcy leaves you little room to haggle over what is shown to the court. When filing, you will be asked to be forthcoming with every debt you own as well as all assets, income, and expenses.
Chapter 7 is what’s known as straight bankruptcy.
Bankruptcy does not clear every single debt you have depending on the form. For example, should you owe child support or income tax, these debts will not be forgiven. Other debts, such as student loans, may only be discharged under extraordinary circumstances. Also, if you’d like to maintain property after the bankruptcy is complete, such as your car or home, you will be expected to keep and maintain these debts with regular, on-time payments. While this form of bankruptcy has many appealing attributes, not everyone qualifies for Chapter 7.
Chapter 13 allows you to repay your debts over three to five years. Your payment through the court will be determined by the debts you owe as well as what amount of disposable income you have coming in each month. This means your monthly expenses are taken into consideration when making payments, unlike when you’re paying these debts directly to the creditors. At the end of your payment plan, you could end up paying less than you actually owe and have the remaining debt discharged.
Will I get to keep my doctor?
The answer to this question depends on your physician. Many hospitals and physicians understand why patients file bankruptcy and will continue to see you. At the same time, a physician holds the right to refuse future treatment should you discharge their fees in bankruptcy.
At the end of the day, you have options. You can always find a new physician should yours stop providing treatment due to bankruptcy. While that reality may sting, bankruptcy could be the answer to preserving your future.