It’s widely known that overwhelming medical debt pushes many Americans into bankruptcy, even if the specific percentage of bankruptcy cases is hotly debated. If you’re recovering from a major illness, the overall numbers don’t matter - the important fact is that you’re drowning in medical debt. Maybe you’ve lost income, or maybe you’re now partially or totally disabled as a result of your medical condition. Whatever your situation, you’re probably extremely anxious about your future and understandably so.
Many people equate bankruptcy with financial ruin or think that it’s for people who just don’t want to pay their debts. These are false perceptions - bankruptcy is for people who can’t pay their debts and is perhaps the only way to avoid financial ruin and make a fresh start.
Unfortunately, many people wait too long before filing for bankruptcy. By the time they consult with an attorney, they’ve already lost their home, had their car repossessed, and are facing several legal actions from various other creditors. So if you’re overwhelmed with medical debts that you can’t pay, keep reading - this post will discuss the benefits of filing for bankruptcy sooner rather than later.
The primary benefit of bankruptcy is that it relieves people of their personal responsibility to pay their debts. In legal terms, this is referred to as the “bankruptcy discharge.” The bankruptcy discharge is essentially a court order that says you are no longer legally obligated to repay a particular debt or debts.
Once you file for bankruptcy, you will need to prove to the court that you cannot pay your debts and meet other requirements in order to receive a discharge. However, once you receive the discharge, creditors are legally barred from trying to collect any debt that was incurred prior to the date you filed for bankruptcy. Depending on your particular case and what you wish to achieve, the discharge might include some or all of your debts.
Hold on to Your Major Assets
Bankruptcy also gives people an opportunity to protect their major assets, such as your home and car. You will have to meet certain requirements, and what assets you can keep will vary on a case-by-case basis. If you qualify, bankruptcy gives you the option to restructure your debt in order to retain those assets you wish to keep. An experienced bankruptcy attorney can evaluate all of your assets and give you advice as to what you will be able to save. But if you wait until after your home has been foreclosed or your car has been repossessed, there is no way to get them back.
Halting Debt Collectors and Collection Efforts
You may already be aware just how relentless debt collectors can be when trying to collect your debt. The letters and phone calls can be overwhelming, with aggressive collectors badgering you to either make payment in full or negotiate a payment plan you can’t afford. Meanwhile, interest and late fees are accruing, and they may even be adding legal fees and other costs to the amount you owe. This is often the point where it feels like your financial situation is rapidly spinning out of control.
Filing for bankruptcy puts a halt to all efforts to collect any debt that you owe as of the date you file. Creditors and debt collectors are legally obligated to halt all collection efforts, including not only letters and phone calls, but also any lawsuits, garnishments, or other legal actions. This gives you the time to work with your attorney to come up with a realistic and affordable way to get your financial situation under control.
If you’ve been suffering from a major illness, you need to focus on your recovery. Your health is your most important asset and if you can’t get better, you’ll never be able to put your life back together. The prolonged stress that comes from not knowing how to pay your debts can lead to severe depression, anxiety, sleep disorders, and other health problems. This stress and the resulting health issues can put you right back in the hospital and add to the debt you’re already facing.
Contact a Minnesota Bankruptcy Attorney
The bottom line is that your medical debt does not necessarily mean complete financial ruin. You don’t need to lose your home in order to pay your medical bills. If you’re not sure where to turn in the face of mounting medical bills, you should meet with an experienced bankruptcy attorney as soon as possible.
Established in 1972, the attorneys at Kain & Scott help people across the state of Minnesota regain control of their finances and get their lives back together. If you’re buried by medical debt and don’t know where to turn, one of our experienced bankruptcy attorneys can help you sort through the options. If you’d like a free consultation, contact us today - simply call 800-551-3292 or send us an email.