In our last post, we discussed the unfortunate prevalence of medical debt for people all across Florida. We noted that despite expanded coverage options, insurance deductibles and the cost of out-of-network care continues to be extremely high. This is making it incredibly difficult for people to afford the medical care they need and many people end up going into debt because of their medical bills.
As stressful as this situation already is, the fact that creditors and debt collection agencies may be contacting you over and over to seek payment can only make matters worse. If this sounds like your situation, it may be time to consider taking some serious steps toward resolving your debt. This could include filing for bankruptcy protection.
Medical debt is unsecured debt, which means that there is no collateral tying you to the creditor. This is different from secured debt which includes mortgages and car payments, as those items can be seized if a person fails to keep up with payments.
Because it is unsecured debt, medical debt is treated differently in bankruptcy than other debts. If you file for Chapter 7 bankruptcy, for instance, it is very likely that your medical debt will be discharged.
If you file for Chapter 13 bankruptcy protection, this and other unsecured debts get dropped to the bottom of the repayment priority list. This means that you may end up paying some, all or none of it back through your repayment plan.
Depending on your financial goals and capabilities, one of these options can prove to be an effective solution for your current situation. If you can discharge or repay debts through bankruptcy, it can be much easier to repay remaining debts and get back on your feet.
Filing for bankruptcy is a big decision, though, and should not be made without understanding your options and rights as a consumer. Consulting an attorney can help you assess your situation and make a decision that is right for you.