Medical debt is one of the leading causes of financial distress in the United States, affecting millions of people every year. Unexpected medical expenses can quickly accumulate, leading to overwhelming debt that can be difficult to manage, especially when combined with other financial obligations. For those struggling under the weight of medical bills, filing for bankruptcy may provide a path to relief. If you’re in Miami and considering this option, consulting with a bankruptcy lawyer can help you understand how to navigate the process and protect your financial future.
Here’s how a Kendall Bankruptcy Attorney can help you find relief from medical debt.
- Understanding Medical Debt in Bankruptcy
Medical debt is considered unsecured debt, similar to credit card debt or personal loans. This means it is not tied to any collateral, like a home or car, making it easier to discharge through bankruptcy. There are two primary types of bankruptcy that individuals commonly file: Chapter 7 and Chapter 13. Each type handles medical debt differently, and the best option for you will depend on your specific financial situation.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is designed to eliminate unsecured debts, including medical bills. When you file for Chapter 7, the court appoints a trustee who may liquidate (sell) some of your non-exempt assets to pay off creditors. However, in many cases, individuals can keep most or all of their assets due to bankruptcy exemptions.
One of the key benefits of Chapter 7 bankruptcy is that it allows for a complete discharge of medical debt. Once your bankruptcy case is complete, you will no longer be legally responsible for paying these debts, giving you a fresh financial start. The process typically takes about three to six months from start to finish.
However, not everyone qualifies for Chapter 7 bankruptcy. You must pass a means test, which assesses your income and expenses to determine if your financial situation meets the requirements for this type of bankruptcy. A bankruptcy lawyer in Miami can help you determine if you qualify for Chapter 7 and guide you through the filing process.
- Chapter 13 Bankruptcy and Medical Debt
If you don’t qualify for Chapter 7 bankruptcy or if you have assets you want to protect, Chapter 13 bankruptcy may be a better option. Chapter 13, often referred to as a reorganization bankruptcy, allows you to keep your assets while restructuring your debt into a manageable repayment plan.
Under Chapter 13, you will create a repayment plan that lasts three to five years, during which time you will make monthly payments to a bankruptcy trustee. The trustee then distributes these payments to your creditors. Medical debt is included in this plan, and depending on your income and expenses, you may only have to pay a portion of the total amount owed. Any remaining medical debt at the end of the repayment period is typically discharged, meaning you are no longer responsible for paying it.
Chapter 13 can be an attractive option if you have a steady income but are overwhelmed by medical bills and other debts. A bankruptcy lawyer in Miami can help you develop a repayment plan that fits your budget and ensures you meet all legal requirements.
- Protecting Your Assets
One of the biggest concerns people have when considering bankruptcy is the potential loss of assets. However, both federal and Florida state laws provide exemptions that protect certain assets from being sold in bankruptcy. These exemptions can include your home, car, retirement accounts, and other essential personal property.
In Miami, Florida’s state exemptions are particularly generous when it comes to protecting your homestead (primary residence), which can be fully exempted regardless of its value, provided you meet certain requirements. A bankruptcy lawyer in Miami can help you navigate these exemptions to ensure you protect as much of your property as possible during the bankruptcy process.
- Consulting a Bankruptcy Lawyer in Miami
Filing for bankruptcy is a significant decision that requires careful consideration and expert guidance. A bankruptcy lawyer in Miami can assess your financial situation, explain your options, and help you choose the best course of action for dealing with medical debt. They can also guide you through the filing process, ensuring that all paperwork is completed accurately and on time, and represent your interests in court.
Medical debt can be overwhelming, but Kendall Bankruptcy Attorney offers a way to find relief and regain control of your financial life. Whether you choose Chapter 7 or Chapter 13, working with a bankruptcy lawyer in Miami can help you navigate the complexities of the bankruptcy process and protect your assets. With the right legal support, you can eliminate your medical debt and start fresh with a more secure financial future.