Have your medical bills built up to the point that you just can’t possibly afford to pay them? There is still help out there for you, as the government provides for a few methods by which you’re able to take care of those debts without sinking into total financial oblivion. By filing for medical bankruptcy, you’re going to find that you can gain a permanent or momentary reprieve from the debt that you’ve racked up. This can be key when you’re desperately seeking a solution of sorts to the financial problems that have been building for some time in your life.
Basically there are two forms of medical bankruptcy that you’re going to find you’re able to apply for. But they are very different, so it’s important that you understand what they really mean to your credit and your life. They both feature very different types of resolutions and plans, but they both guarantee the reprieve that you need when it comes to escaping those mounting debts. Here are the 2 most common ways out, when it comes to resolving your medical bills:
1) Chapter 7 Bankruptcy.
The medical bankruptcy rules regarding this sort of filing are such that you will be able to totally clear your debts, and wipe them out in one swoop. However, what you’re also going to find is that this means you’re also going to face some serious damage to your credit rating, so it’s important to understand what this form of bankruptcy entails. But at the most basic level, filing for chapter 7 means that you’re declaring yourself unable to pay your debts, after which all acceptable forms of property that you own will be auctioned off to pay a portion of the debt, and then it is wiped clear.
However, there are a few regulations and medical bankruptcy rules regarding when and how you are able to file. In order to start the filing process, you’re required to take a US Trustee’s Office approved course on credit counseling. Most typically you do have a few choices as to how that takes place however. You’re able to conduct your sessions online, in person, or even on the phone in many cases. That meeting is to tell you your options, and sure up whether or not you want to go through the process in general. If you come to a plan that works for you, you can cancel the file, otherwise you can also decide to continue the process after receiving counsel.
From there you have to pass a means test, which is a test by which they assess all of your assets and see if you do have the means to pay your creditors. If it is deemed that you can pay, then you are not allowed to file for chapter 7 medical bankruptcy. However, if it is deemed that you cannot, you are allowed to move forward. The last thing that can cancel your filing is fraud, if it’s found that you’ve hidden possessions, property, or anything else of the like under a different name, the bankruptcy is void.
2) Chapter 13 Bankruptcy.
This is the other type of medical bankruptcy that you’re able to file in order to aide you with mounting debt. But the way that this differs from 7 is in one major way, and that is you are expected to pay everything back at some point. This is more of a stall than wiping the debt clean, and it only buys you time to actually pay off the money as you’re able. Basically this buys you a reprieve so that you can eliminate your debts for a period of around 3 to 5 years, and slowly pay them back completely.
However, if you do not keep to your time scale you will find that you are forced to auction off your possessions in order to make up the difference on what you owe. What you’re also going to find is that not everybody can apply for chapter 13. There has to be a formal investigation as to whether or not you have the money to pay for your medical debt with disposable income. If it’s determined you cannot surmount the bills in the time period determined, you won’t be able to file.
Remember that these are both last resorts as a means to file medical bankruptcy however. You have to be wary of doing so, as both will stay on your credit report for a term of 10 years, meaning that for an entire decade it will be almost impossible for you to get any type of credit. That’s why medical bankruptcy forms should only be sought if you are really serious about having to apply.