It is estimated that one in every three Kentuckians struggles to pay for healthcare. Northern Kentucky has the second-highest number of people across the state who are unable to pay medical bills. For this reason, medical debt is one of the top reasons people file for bankruptcy in Northern Kentucky.
If an injury or illness has left you overwhelmed with medical debt, bankruptcy can provide a way out for you. We will provide the details you need to know about bankruptcy from medical debt in Northern Kentucky so you can determine whether it’s the right course of action for you.
What is Medical Bankruptcy?
While medical debt may be the trigger for filing bankruptcy, it’s highly unlikely that it’s the only debt you have and hence the term medical bankruptcy does not exist. When you file for bankruptcy in NKY, apart from medical debt, you are required to list all other debts you owe including mortgage, credit cards, and personal loans. This ensures that all your creditors including your medical bill collector get a fair chance to collect their debt.
Medical Debt Criteria Under Bankruptcy Law
Debts under bankruptcy law are divided into two categories, secured and unsecured debts. Secured debts like home loans and car loans are attached to collateral such as a house or car and come in first priority in terms of repayment.
The unsecured debts are further classified into unsecured priority debts and non-priority unsecured debts. Unsecured priority debts include some government taxes, child support, and student loans.
Medical bills fall under the non-priority unsecured debts and are often the last in line for repayment. The remaining funds available determine whether the creditor gets partial or any repayment at all.
What Type of Bankruptcy Do You File?
In NKY, you have two options, Chapter 7 or Chapter 13. The choice between the two options largely depends on your current financial status.
Chapter 7 Bankruptcy
If you have huge medical bills, and you pass the means test, filing for Chapter 7 may be the best option for you.
Under a Chapter 7 bankruptcy, all your medical bills can get discharged including those you’ve paid with personal loans or charged on credit cards and the creditor can no longer come after you. This process typically takes a few months.
Chapter 13 Bankruptcy
If you are employed and you own assets of substantial value, a Chapter 13 bankruptcy is the best way to do away with your medical debt.
Under a Chapter 13 filing, your medical bills would be lumped together and the trustee determines how much you can pay your healthcare providers based on your disposable income and the amount of secured debts you have. The repayment process may take between 3-5 years.
In the end, whichever option you choose to file with the help of your NKY bankruptcy attorney, will leave you debt-free and give you the fresh start you need.
Consult an Experienced NKY Bankruptcy Attorney for Your Medical Debt
If you would like to know more about bankruptcy from medical debt, contact the most preferred NKY bankruptcy attorney, W. Ron Adams. For over 33 years, he has helped hundreds of NKY residents get their medical debt discharged and make it through the bankruptcy process. Call us to schedule your free bankruptcy consultation.