Chapter 7 Bankruptcy and Medical Debt

NJ Bankruptcy Attorney Assists Those with Medical Dept File for Chapter 7 BankruptcyOne of the biggest ways people end up accruing debt is the combination of inadequate health insurance coverage and the constantly increasing cost of healthcare.

People find it difficult to meet the financial demands and high costs associated with treatments, surgeries, medications, etc., leaving them facing considerable medical debt.

Despite this ever-growing problem, there is a bit of a silver lining—Many people have found they can eliminate their medical debts by filing for Chapter 7 bankruptcy.

How Chapter 7 Bankruptcy Can Help Eliminate Medical Debts

Chapter 7 bankruptcy is the simplest and most common form of bankruptcy. It doesn’t involve a repayment plan like Chapter 13 bankruptcy. Instead, it involves the bankruptcy trustee gathering and selling your nonexempt assets and using those proceeds to pay back creditors or those you owe money to.

What makes Chapter 7 bankruptcy a viable option for those facing medical debt is that medical debt is considered a non-priority general unsecured debt. This means it’s the last to get paid under Chapter 7 bankruptcy and most non-priority general unsecured debts end up discharged without any repayment.

Basically, if the bankruptcy trustee is able to make any payments to your creditors your medical debts won’t receive priority. In addition, if they’re able to pay a portion of your medical debt through bankruptcy, whatever is left over will be wiped out when you receive your discharge.

One other benefit to Chapter 7 bankruptcy is the fact there is no limit or cap on how much medical debt can be discharged. When it comes down to it, all you have to do is be able to qualify for a Chapter 7 bankruptcy, which would mean your income must be low enough to pass a disposable income means tests and you don’t have a lot of assets you can’t exempt.

Work With An Experienced Bankruptcy Attorney

To be sure that Chapter 7 bankruptcy is the best route for you and your medical debt, you should hire an experienced bankruptcy attorney. In New Jersey, the Law Office of Joel R. Spivack is specifically dedicated to all legal matters relating to bankruptcy.

If you’re considering Chapter 7 bankruptcy, please contact us today for a free consultation. The Law Office of Joel R. Spivack Esq. can be reached at 856-488-1200.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.

We are here to help you.

Is this a New Jersey matter or Philadelphia Region matter?
We are licensed to practice in New Jersey and Pennsylvania.

Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
Skip to content