In Minnesota, family members are not responsible for the debt of their deceased family members in most cases by simply being related to the person. Family members should be very careful when signing documents at hospitals and nursing homes because that is where a family member can make themselves liable for debt and may not even know it. Also, spouses may be liable for certain medical debt (Minn. Stat. § 519.05) and of course any debt he or she co-signed.
Unfortunately, when emergency situations arise, we act and we trust the individuals who are caring for our loved one. We often do not have time, nor the mental or emotional energy to read and sift through pages and pages of legal jargon that is thrown at us. We just want our family member taken care of. We sign on the dotted line. We do what needs to be done. And then, those entrusted with the care of our loved ones start sending bills and those bills are not small. The collection letters start piling up and we had no idea we had even agreed to pay!
Luckily you have options. If you are the co-signor on debts or are the guarantee on hospital or nursing home debts for a loved one who has passed away (and you may have other debt of your own as well), you are able to contact Kain & Scott to discuss whether bankruptcy is the right choice for you. There are two bankruptcy options and one just might provide you with the kind of relief you need so that you can focus on more important things.
The two bankruptcy options, Chapter 7 and Chapter 13, can provide relief with these hospital and nursing home bills. Both options begin with a free consult with a Kain & Scott attorney, NOT A PARALEGAL. You can choose to complete the consult in person, over the phone, via skype, or via FaceTime. Once you decide to proceed, you set up a Review and Sign appointment, which is where you review all of the documents with a legal assistance and your attorney before it gets filed with the Bankruptcy court. The beauty of the process is there are NO WORKSHEETS to fill out!
In a Chapter 7, after the review and sign appointment, the bankruptcy petition and schedules are filed. You must take a credit counseling course before you file and another one after you file. After your bankruptcy is filed, you will have a 341 meeting (commonly called a meeting of the creditors). At this meeting, the bankruptcy trustee will verify the information contained within your bankruptcy filings. Creditors rarely show up to these meetings. You usually receive notice from the bankruptcy court that your debt has been discharged around 60 days after the 341 meeting. That completes the process, assuming you have no assets that need to be negotiated. No two cases are the same, so keep in mind that this explanation is simply an illustration of how a case should flow, not a guarantee.
The beginning process for a Chapter 13 bankruptcy id similar to the process for a Chapter 7. The petition is filed after the Review and Sign appointment. You have to take the two credit counseling courses. After you file, you have the 341 meeting with a Trustee. So, what is different? In a Chapter 13, instead of the debt being discharged after the 341 meeting, we create a payment plan at the Review & Sign appointment that gets filed with the petition and you make payments to the bankruptcy trustee. The trustee then disburses those payments to your creditors each month. You make these payments for a period of 3 to 5 years. Any remaining debt that is dischargeable at the end of your payment plan is discharged.
How do you decide between a Chapter 7 and a Chapter 13? The first factor is income. If you fall below what is called the “median income,” you automatically qualify for a Chapter 7 (though there are some circumstances that may necessitate a Chapter 13, which I will discuss momentarily). If your income is above the median income, that does not necessarily bar you from a Chapter 7, it simply means that you need to go through an additional step, called the means test. If you do not qualify for a Chapter 7, you can still do a Chapter 13 and your payment plan must be a 5-year plan. If you are under the median income and choose to do a Chapter 13, your payment plan can be for a few as 3 years or up to 5 years (and anywhere in between).
Either a Chapter 7 or a Chapter 13 can alleviate the problem of nursing home and hospital debt that you guaranteed.
A few common reasons for folks to elect to do a Chapter 13 when they would otherwise qualify (income-wise) for a Chapter 13 would be if they are behind on mortgage payments, car payments, or rent or if you have insurmountable tax debt. A Chapter 13 can help cure these arrearages and prevent or stop foreclosures, evictions, and repossessions or can get you a better repayment plan on tax debt.
Even if you qualify based on your income, you may be not able to do a Chapter 7 if you have filed for a Chapter 7 within the last 8 years. In that case, a Chapter 13 may be the best option for your current situation.
It’s simple! Call Kain & Scott at 800-551-3292 and set up a free consultation with one of our attorneys. You can even visit our website at www.kainscott.com and speak to a representative online to set up your free consultation. You have enough to worry about, don’t let hospital and nursing home debt be one of them. You have been through enough. Give us a call today!