Overwhelming medical debt is a significant factor that leads to someone needing to file a bankruptcy in Memphis, TN. In most cases, this arises from failure of the debtor to have medical insurance. Even if you do have medical coverage, it is possible to run up a lot of debt from medical bills that your insurance company does not pay or from the costs of prescriptions and other ongoing medical needs.
Can You File Bankruptcy for Medical Bills?
A Chapter 7 bankruptcy can only be filed once every 8 years. Therefore, we urge our clients to obtain medical insurance before filing a Chapter 7 bankruptcy, if they do not have coverage already. For instance, you could file a Chapter 7 bankruptcy and wipe out $50,000 in medical debt, but then have to go into the hospital the next day due to an unexpected car accident and run up another $100,000 in medical debt. At this point, you would not be able to file another Chapter 7 bankruptcy for 8 more years to eliminate that debt.
If you don’t have medical insurance or think you may incur more medical debt in the near future, you may want to consider filing a Chapter 13 bankruptcy. Under a Chapter 13 bankruptcy, most people can eliminate up to 90% of their medical debt (and in some cases, even more).
Also, since a Chapter 13 bankruptcy plan can run for up to 60 months, you may be able to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy at some point to wipe out the new medical debts incurred after the date you filed your Chapter 13.
Depending on your financial situation, a good place to look for health care coverage is the Affordable Healthcare Act. I know of one individual who now has a Blue Cross Blue Shield policy though the Affordable Health Care Act with a base premium of over $400 per month. After applying the tax credit allowed under the new law, this person pays less than $100 per month for coverage on her and her child.
Arthur Ray Law Offices in Memphis can help you with filing bankruptcy on medical debt. Arthur Ray is an affordable bankruptcy attorney that can help you with additional questions on can file bankruptcy for medical bills.
Do not act on anything you read on this site without hiring an attorney. This is why we offer, for free, to prepare a bankruptcy petition for you to see what works best in your personal financial situation. We provide representation for individuals who live in Lauderdale, Tipton, Fayette and Shelby County, Tennessee, who qualify to file bankruptcy in the Bankruptcy Court for the Western District of Tennessee located in Memphis, Tennessee.