One of the most common reasons people in New York City fall into financial straits is due to medical debt. Unexpected illnesses and injuries can cause individuals to accrue thousands of dollars’ worth of medical bills, especially if they are uninsured or underinsured. Fortunately, individuals are often able to seek relief from their medical debt through bankruptcy.
How Are Medical Debts Treated During Bankruptcy?
While some debts such as certain tax obligations and alimony receive special treatment and cannot be discharged, medical debts are considered to be general unsecured debts similar to credit card debt and do not receive any priority treatment for repayment. Depending on the chapter under which a person files, bankruptcy can allow a person to have a large amount of their medical debts wiped clean in sometimes as little as just a few months.
Immediately upon filing for bankruptcy, debtors are provided with an “automatic stay” which prevents collection efforts and many other forms of creditor communication, allowing them to avoid relentless phone calls, threatening communications, and concerns over being sued for medical debt. For those who qualify for Chapter 7 bankruptcy, these debts along with their other general unsecured debts can be wiped clean, though the process may require a person to liquidate some of their non-exempt assets. Conversely, with Chapter 13 bankruptcy, medical bills are lumped together with other general unsecured debts into a 3-5 year repayment plan, after which any remaining debts are discharged.
When Should I File?
If you are struggling under enormous amounts of medical debt, you may feel pressured to file for bankruptcy as soon as possible to achieve relief. This may be unwise, as you do not want to file for bankruptcy too soon. If your medical condition requires further treatment, any additional bills that are incurred after your filing date will remain your responsibility and will not be able to be discharged. Since there is a lengthy waiting period before a person may file for bankruptcy again, it is best to wait until you have accrued all of the debts you will want to discharge.
Contact a New York Debt Relief Lawyer Today
At the Law Offices of Simon Goldenberg, PLLC, our award-winning bankruptcy lawyers can help you pursue the cost-effective and practical legal solutions necessary to help you overcome your medical debt. Our firm is easily accessable to residents of New York City, with offices in Brooklyn and Long Island. Backed by overwhelming support from past clients, we have what it takes to ensure your best interests are protected and help you achieve a clean financial slate.
Call (888) 301-0584 today to discuss your legal options in detail.