If you are feeling overwhelmed by medical debt, you are not alone. It’s hard to get answers from insurance companies and doctors and clinics, and when you do get an answer, it often feels like you’re being given the run-around. The reality is that medical debt is the leading cause of bankruptcy in the United States, and you deserve to have your debt forgiven if it causes stress for you and your family.
Here are some important things to understand if you are overwhelmed by medical debt in Texas:
Chapter 7 bankruptcy and Chapter 13 bankruptcy provide relief from medical debt
Medical debt falls into the category of unsecured debt, which is a type of debt that can be forgiven through bankruptcy. There are generally two types of bankruptcy that can help if you have overwhelming medical debt: Chapter 7 bankruptcy and Chapter 13 bankruptcy.
- Chapter 7 bankruptcy involves liquidating assets to pay off creditors. If you have any remaining eligible debts after your assets have been liquidated, bankruptcy discharges the remaining debts. IMPORTANT: There may be some assets like your vehicle or other types of property that can be shielded from liquidation. Talk to an experienced bankruptcy lawyer about your options.
- Chapter 13 bankruptcy involves a plan to restructure debts to make paying them down manageable. If you don’t qualify for Chapter 7 because you still have significant income or assets, then Chapter 13 may be the best path toward debt relief. Chapter 13 allows you to create a manageable repayment plan for paying back all or a portion of your debt over a three-to-five-year period. You can include medical debt in the repayment plan, but you may not need to pay the total amount. Any remaining balance at the end of the plan can be discharged.
Don’t give up. You have options to make a fresh start.
Often the key to getting your medical debt and other types of debt forgiven is to choose a bankruptcy lawyer you can trust and easily communicate with. For more on that, please see our overview of “Choosing the Best Bankruptcy Attorney for Your Case.”