It happens. People lose their jobs. People change jobs. A young adult becomes too old to be included on her parent’s health insurance policy. A divorce can results in the party that was relying upon her spouse for insurance no longer being covered.
You didn’t plan on getting sick but you did. Your illness required you to report to a hospital emergency room. The emergency room doctor determined that you needed to be hospitalized. Expensive tests were done and medicines were prescribed. Thank God you recovered from the illness but you now face medical bills totaling more than your meager annual income. A lawsuit by one of the medical providers and resulting garnishment will simply make it impossible for you to sustain yourself. Further, medical debt is not the only debt which results from sickness. If you are sick and can’t work, you may need to use your credit card to buy groceries. You may need to visit a payday lender because you can’t pay your rent. The bills pile up.
So what do you do? Bankruptcy may be an option. Studies have found that medical expenses account for as many as 60 percent of bankruptcies filed in the United States. Many people feel obligated to repay as much of the debt to the doctors that helped them to get better as possible. For these folks, a chapter 13 bankruptcy may be a good option. In a chapter 13 bankruptcy, a plan is formulated so that a portion of the debtor’s income can be paid to a trustee each month. The trustee uses that money to pay creditors. So long as the individual complies with the plan provisions, any balance still owed at the plan’s conclusion will be forgiven or discharged. For others, there simply isn’t any extra money to pay into a chapter 13 plan. For them, a chapter 7 straight bankruptcy may be the best option.
If you are overwhelmed with debt resulting from an illness or accident, you owe it to yourself to explore all of your options. Our conveniently located offices offer a free and confidential consultation with an experienced attorney. We will help you to review your financial situation and explore all of your options. There is light at the end of the tunnel. Please let us know if we can help.
Brad Botes is a principal of each of the Bond & Botes Law Offices throughout Alabama, Mississippi, and Tennessee. He holds a Bachelor of Science from the University of North Alabama, and a Juris Doctorate from Cumberland School of Law at Samford University. He and his team of bankruptcy lawyers have spent over 30 years guiding people through financial challenges. Read his full bio here.