For many people in Cortland, NY, addressing medical debt during a bankruptcy is a top priority. After all, medical debt can become significant and may even be one of the main reasons why you have decided to move forward with filing for bankruptcy.
At Grady BK, PLLC, we understand just how overwhelming the bankruptcy process can feel. That is why we are here to take care of your bankruptcy case, providing you with one-on-one legal assistance, from start to finish. In this article, we will discuss how you can address medical debt during bankruptcy in Cortland, NY, and what this process looks like.
Are Medical Bills Dischargeable in Bankruptcy?
The main concern you may have if you are planning on filing for bankruptcy in Cortland, NY, is medical debt. The good news is that medical debt is dischargeable in both Chapter 7 and Chapter 13 bankruptcy.
Bankruptcy law categorizes debt into two categories: secured and unsecured debt. Because medical debt is not usually backed by collateral, it’s considered to be unsecured debt, which is dischargeable.
How dischargeable debt is managed during bankruptcy will ultimately depend on the type of bankruptcy you qualify for.
How Chapter 7 Handles Medical Debt
Generally speaking, dealing with hospital bills through Chapter 7 bankruptcy in New York is the preferred option. This is because Chapter 7 allows you to fully discharge all medical debt since it is unsecured debt. However, not all Cortland residents will qualify for Chapter 7.
Chapter 7 bankruptcy has certain income requirements, so if you earn too much, you won’t qualify. But if you do meet the income requirements for Chapter 7, the entire process is usually very straightforward and quick.
You will need to file for bankruptcy, including all of your property, assets, and income information, and creditors. And when your case is complete, all eligible debts, including medical debts, will be discharged, freeing you from personal liability.
What Happens to Medical Debt During Chapter 13 Bankruptcy?
On the other hand, Chapter 13 bankruptcy looks quite different than Chapter 7, as this follows a repayment plan structure. Chapter 13 is designed for those with higher incomes, allowing them to be put on a 3 to 5 year repayment plan as a way of realistically paying off qualifying debts.
Like Chapter 7 bankruptcy, Chapter 13 comes with an automatic stay, which prohibits creditors from pursuing collection actions against you. The automatic stay will remain in place for the duration of your repayment plan, and all of your debt will be interest-free. If at the end of your repayment plan, all of your medical debt hasn’t been paid off, the remaining balances will most likely be eligible for discharge.
What About Ongoing Medical Treatment?
Although medical debt is almost always dischargeable when you file for bankruptcy, this usually only includes medical debt you accumulated before you filed. Because of this, if you require ongoing medical treatment, things can get a bit tricky.
How you can manage ongoing medical debt post-bankruptcy depends on the type of bankruptcy you qualify for. For Chapter 7, post-petition debts aren’t usually included. So, you may need to find other ways of paying for these bills, like using a payment plan provided by your doctor.
You can also look into different medical treatment options that may be more affordable. Your medical doctor or healthcare team can most likely help you do this so that you can continue to get the treatment you need at the best possible price.
Additionally, if you are filing for Chapter 13, the same rule will generally apply to post-petition medical debt. However, you can request that the bankruptcy court modify your plan to reflect any additional medical debt you have accumulated. If approved, this would adjust your monthly payments if you have additional medical debt that you can’t pay in full immediately.
Local Considerations in Cortland, NY
Cortland, New York, residents also need to take into consideration local billing and bankruptcy practices. For instance, every healthcare company in Cortland may handle billing differently, which may alter your financial strategy. This is especially important to understand if you have ongoing medical treatment or any medical bills that come in after you have already filed for bankruptcy.
The good news is that most healthcare companies now provide alternative payment options that allow you to pay in monthly installments. So, if these bills aren’t included with your bankruptcy plan, this is the next best option.
You should also prioritize getting legal representation from a bankruptcy lawyer in Cortland, NY, specifically. A local attorney will have extensive experience in New York bankruptcy law and can help you get the most favorable outcome for your case.
FAQ:
Can I include hospital bills in bankruptcy?
Yes. Almost all types of medical debt are dischargeable, regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy.
Will bankruptcy affect my ability to receive medical care?
No, especially not if the medical care you need is urgent or emergency care. You can continue to get any medical care that you need, just keep in mind that the debt you incur after bankruptcy will most likely be your responsibility.
Cortland’s Top Compassionate Bankruptcy Attorney
Eliminating medical debt with bankruptcy is one of the best options available to those who are unable to address medical debt on their own. At Grady BK, PLLC, we strive to simplify the bankruptcy process so that you know what to expect and can proceed with peace of mind. We believe that there is no one-size-its-all solution, which is why we prioritize a personalized approach for each of our clients.
At Grady BK, PLLC, not only can we help provide clarity regarding bankruptcy in New York, but we can also help you with the entire process. So, whether you are looking for guidance or a more hands-on approach, we are here to help.
Contact us today at 315-299-9005 to discuss your situation with a bankruptcy attorney in Cortland, NY. Our team at Grady BK, PLLC, is here to assist you with all of your bankruptcy questions or concerns.
