Bankruptcy As An Option For Dealing With Medical Debt

A severe illness or catastrophic injury can result in overwhelming medical expenses. In fact, medical debt is one of the most common causes for financial distress. This is in large part due to the rising cost of health care and insurance not fully covering medical costs.

The attorneys at Purrazzella & Purrazzella, P.A., have been there for individuals facing overwhelming medical debt for more than 30 years. We know what steps to take in eliminating medical debt through the filing of bankruptcy and other debt relief options. We get to know your personal circumstances and help find the right method of financial relief for you.

Medical Debt And Chapter 7 Bankruptcy

While a Chapter 7 bankruptcy filing can eliminate most unsecured debt, the bankruptcy court will categorize the importance of paying back this debt. Debts that receive high priority generally cannot be eliminated through bankruptcy.

Fortunately, this does not apply to medical bills and medical expenses. Courts generally allow for the discharge of medical debt through bankruptcy. Also, there is no limit to how much medical debt you can discharge through a Chapter 7 filing.

However, before filing for Chapter 7 bankruptcy, you still must meet satisfy the Chapter 7 bankruptcy means test. This means you did not receive another bankruptcy discharge within the past eight years. Also, your income after adjustment under the bankruptcy guidelines cannot exceed the New Jersey state median household income.

Chapter 13 Bankruptcy And Medical Debt

You may still be eligible to file for Chapter 13 bankruptcy, even if you do not meet the Chapter 7 bankruptcy means test. While Chapter 13 bankruptcy will not eliminate unsecured debt such as medical expense, it does allow for you to present a payment plan to the court allowing you to pay back your bills in a more manageable fashion. The amount you will pay creditors back depends on your household income, expenses and assets. One drawback of Chapter 13 bankruptcy is that you may not be able to file for this relief if your total income exceeds what is allowable under the Bankruptcy Code.

It is always important to have legal representation on your side to make certain you understand all of your options. Our lawyers will address your concerns while guiding you through the bankruptcy process. We will look at your specific situation and recommend the bankruptcy or debt relief option we feel is best for you.

Let Our Bankruptcy Attorneys Help You

To discuss your financial situation in detail, please contact Purrazzella & Purrazzella, P.A., in Toms River, today by calling 732-691-4589. We represent individuals in Monmouth County and across the entire state of New Jersey.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.