Friday, November 30, 2012

Chapter 7: Protection From Bankruptcy Medical Bills


Medical bills are the most common reason for people seeking bankruptcy. However, seeking protection from Bankruptcy medical bills is possible because hospital bills are considered as unsecured debt. A Chapter 7 bankruptcy is perfect in the sense that it is the quickest and the debtor can walk away with just a few nicks and cuts, particularly some properties that are not covered by exemption and your overall credit score, which may impact your ability to secure loans in the future.


Bankruptcy medical bills could be the best thing that you can do to restart your financial future with a clean slate. There's a certain stigma to declaring bankruptcy but it's actually a very personal matter. Your privacy is protected and you can still move forward with your life as opposed to the misconception that you walk away only with your clothes on. In some cases, you can even keep your car under bankruptcy.

What happens is the court designates a trustee that will inventory your properties, determine which are exempted and sell those which are not. The money raised from the sale will be used to pay your creditors. To know which properties are exempted from Chapter 7 bankruptcy, talk to a lawyer proficient with bankruptcy laws. Some examples of properties covered by exemptions are: your house, tools or equipment you use in your profession, social security, disability or unemployment benefits, or life insurance. There could be some additional exemptions depending on state laws.

After filing bankruptcy, the court orders the creditors to stay away. But the law also allows creditors to prove that they are justified in collecting your debt, the burden of proof however swings to their side. Bankruptcy however will not wipe out all your debts. Any lien you owe prior to the medical emergency stays on records and you are required to settle it in due time.

Filing for bankruptcy medical bills will not automatically exempt you from paying the IRS. There are conditions before the federal tax agency will let you off the hook. Again, consult a bankruptcy lawyer to explain to you all the gradations of law in relation to Chapter 7 bankruptcy medical bills. You might be able to ward off your creditors but you can't get away from the IRS. Federal agents can still swoop in even after bankruptcy and seize your properties but only if they decide that you are trying to run away from your responsibility as a taxpayer.

3 comments:

  1. Yes, if you really want to do away with your huge medical bills, filing for Chapter 7 bankruptcy is perhaps the best possible and quick way out. Since medical bills come under unsecured bills, wiping those off is relatively easy. Moreover, if your living comes from disability or social security benefits, it becomes much more easier on your end to shed off your unpaid medical bills since the bankruptcy trustee would be having no object to liquidate.

    Marc Brown
    Financial Writer
    Oak View Law Group

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  2. I'm glad to see your post about on how to protect a bankruptcy medical bills. I need to know about this because this post is one of my problem and I'm glad because you can help me to have an idea. Keep on sharing!

    chapter 13 bankruptcy in chicago

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  3. I had a buyer that wanted to buy a home in Arizona, but he had a Chapter 7 bankruptcy 7 months ago. After researching the web I found a loan program at http://www.cfsflex.com, they allow a
    mortgage after a foreclosure, short sale, or bankruptcy. There is only a six month waiting period. Good to see lending options coming back.

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