Are you facing significant medical debt? Do you watch more medical bills arrive each week with no idea how you can pay them? If so, you should get in touch with an experienced Georgia bankruptcy attorney.
Discharging Medical Debt in Georgia Bankruptcy:
When you file for a Georgia bankruptcy, medical bills are included in the bankruptcy. Medical debt is one of the most common reasons that people seek bankruptcy protection.
Priority and Nonpriority Debts in Bankruptcy:
When you file Georgia bankruptcy, your debts are separated into two categories: priority and nonpriority. Child support, spousal support, and some tax debts are designated priority debts. Priority debts are not discharged and must be paid in full. They are not eliminated by bankruptcy. Any money available from the bankruptcy estate will be used to pay towards any priority debts first.
Are Medical Bills a Priority Debt During Bankruptcy?
Medical bills are not considered priority debts. Medical bills are typically unsecured debts and are treated similarly to credit cards during bankruptcy. Medical bills do not receive priority treatment during bankruptcy. As a nonpriority debt, medical bills are discharged by bankruptcy.
How Does Bankruptcy Eliminate Your Medical Bills?
Bankruptcy filers can eliminate their medical bills through Chapter 7 bankruptcy or Chapter 13 bankruptcy. The type of bankruptcy you file depends on your situation and specific eligibility requirements.
Eliminating Medical Bills During Chapter 7 Bankruptcy:
Filers who qualify for Chapter 7 bankruptcy receive a discharge of debt that wipes out their medical bills and most other unsecured debts. The bankruptcy court does not limit the amount of medical debt that can be discharged in a Chapter 7 bankruptcy. Medical bills that were paid using credit cards are also discharged along with all other credit card debt and other qualifying debt. To file for Chapter 7 bankruptcy, the filer must pass the Chapter 7 means test.
Eliminating Medical Bills During Chapter 13 Bankruptcy:
In Chapter 13 bankruptcy, medical bills and other general unsecured debts are lumped together in one repayment plan. The amount paid to the bankruptcy court each month for the repayment plan depends on income, expenses, and nonexempt assets with the money going to pay creditors. During the Chapter 13 repayment plan, creditors receive a pro-rata portion of the total amount. To be eligible for Chapter 13 bankruptcy, you must make enough to pay the bills you are required to pay in full through the plan, such as all priority creditors. Chapter 13 also includes debt limits that apply to medical bills and other debts.
If you have questions about filing for Chapter 7 or Chapter 13 bankruptcy to eliminate medical debt, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.