Steps to filing a Medical Bankruptcy:
1. If the majority of your debts are medical, you should try to work out alternative payment arrangements with these creditors. They are less likely to pursue collection methods like garnishment.
2. If that doesn’t work, consult with an attorney to determine if you qualify, and which chapter to file.
3. Submit your documents so your attorney can prepare your petition. Take your online credit counseling course, then review and sign your petition with your attorney. Your attorney should then file your case for you.
4. Submit your schedules and proposed payment plan if you are in a Chapter 13. For both Chapter 13 and 7, comply with all requests from your trustee.
5. Attend your 341 Meeting of Creditors.
6. Take your second bankruptcy counseling course.
7. In a Chapter 7, wait for discharge. In a Chapter 13, you must complete your payment plan for your case to be discharged.
Is Medical Debt dischargeable in a Bankruptcy?
All your medical debts incurred before your bankruptcy filing date can be included in your bankruptcy.
In a Chapter 7 bankruptcy, your medical bills will be wiped clean. You will not be obligated to repay these bills. Your case will be eligible for discharge 3-5 months from the date that you file. There are limits on income and asset values for a Chapter 7 bankruptcy, so talk to an attorney to see if you qualify.
In a Chapter 13 bankruptcy, your debts will be reorganized into a payment plan that will last 3-5 years. The plan will be formulated using your income and reasonable expenses deducted by the court, so you shouldn’t have to pay more than you can afford. Any dischargeable debt remaining at the end of your payment plan will be discharged.
Will I lose my Doctor if I file bankruptcy on her bill?
Emergency services and rooms can’t refuse to help you because you have filed bankruptcy. Doctors’ offices, however, can. If you file a Chapter 7, your debt to your doctor will legally be discharged but they may refuse to continue service unless you opt to pay off the debt post-bankruptcy. In a Chapter 13, whatever your past-due amount to your doctor is will be spread out over your 3-5 year payment plan, so they may choose to continue seeing you.
What if I have a chronic medical condition? I will end up back in debt, so when should I file?
If you are facing liens, garnishments, and other collection methods because of your debts, you shouldn’t wait to acquire more medical debt to file bankruptcy. Once either chapter of bankruptcy is filed, an automatic stay of protection is activated which will prevent your creditors from garnishing your wages and collecting on your debts. A Chapter 7 bankruptcy can be filed once every eight years. If you file a Chapter 7 bankruptcy to discharge your medical debt and fall back into debt before the 8 years is up, you can file a Chapter 13 bankruptcy.
How much does it cost to file Medical Bankruptcy in Arizona?
In Arizona, the filing fee for a Chapter 7 bankruptcy is $335. The filing fee for a Chapter 13 is $310. You will also have to pay a nominal fee for each of your credit counseling courses. Fees for legal representation will vary based on the jurisdiction you file in, your attorney’s experience level, and your case’s complexity. Some attorneys, including our law firm, can represent you in a Chapter 7 Bankruptcy for absolutely $0 down. Most of your attorney’s fees in a Chapter 13 will be worked into your plan.
Is Medical Bankruptcy just for my medical debt?
Except for in circumstances like deciding whether to surrender a vehicle, you don’t get to pick and choose which debts are included in your bankruptcy. That means ALL your debts- your credit cards, registration loans, the money you owe your mom for paying your mechanic’s bill- are included in your bankruptcy. Some debts can’t be discharged, such as child support and student loans, but you will still have to list them in your bankruptcy petition.