Medical Bills Piling Up? Use Chapter 7 Bankruptcy to Discharge Them

All it takes is one illness for people to start to fall behind on their bills. Medical problems and their costs are one of the leading cause of bankruptcy in the United States. As soon as a person realizes that they will have trouble paying their monthly bills, they should contact a chapter 7 bankruptcy attorney. That will protect as many of their assets as possible. The attorney will review all of their bills and income. This will tell them whether the person qualifies to use this provision of the bankruptcy law. In 2005, the federal law was amended to limit this provision to people who make under the median income for their state.

People are often concerned about losing their house and car in a bankruptcy proceding. These are secured loans and people must be current on their payments to protect them during a chapter 7 bankruptcy filing. Bankruptcy will discharge unsecured debt such as credit cards and medical bills. However, there are some debts that will not be forgiven. Those include student loans and child support payments. With many of their debts erased, it will be easier for the person to focus on the remaining payments.

The Chapter 7 process is known as the Fresh Start bankruptcy because it lets people start their life over in just a few months. After the lawyer petitions the court to have the debt discharged, the judge appoints a bankruptcy trustee. The trustee makes a list of all assets that will be sold for cash. There is also a meeting that the creditors get to attend to learn what will be sold. This can make a debtor very nervous. Having a lawyer will ensure that only the correct items are sold. Federal and state law prevent the sale of a person’s home, car, or clothing and other needed assets. The lawyer can also speak for them at the creditor hearing. Normally it lasts less than a half hour. Once the sale is complete and the proceeds have been divided among the creditors, the process is finished. Usually it takes three to six months to complete.

 

    

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