Life events, such as unexpected illness or injury, can have significant effects on a person’s life. One of the areas that it can affect is finances. Medical debt can grow quickly, even if the person has insurance. Hospital stays, emergency room visits, specialist care and ongoing treatments can quickly add up. The financial hit can become worse if the person is unable to work.
Some people may turn to credit cards to pay those bills, or they may seek out personal loans. While those are valid ways to pay medical bills, they don’t do away with the debt balance. If the debt becomes more than they can handle, they may seek options for financial relief. Bankruptcy is one of those options.
How can bankruptcy help?
Consumer bankruptcies, including Chapter 7 or 13 bankruptcy, address medical debt. Once the bankruptcy is filed, the court issues an automatic stay that stops collection attempts. That point alone can give the individual relief as they deal with their medical issues.
In the case of either type of bankruptcy, the medical bills and other eligible debts are discharged when the bankruptcy concludes. Being free of those debts may make it easier for the person to have a better financial foundation as they continue to heal from the illness or injury they’re dealing with.
Filing bankruptcy is a major decision, so it’s best to find out about the rights and responsibilities you have throughout the process. Working with someone familiar with these matters may make the decision a bit easier to make.