Navigating medical debt through Chapter 13 bankruptcy

 Posted on May 19, 2024 in General Bankruptcy Topics

Medical debt can quickly become overwhelming. It leads to financial distress for many individuals and families. In these situations, Chapter 13 bankruptcy offers a structured path to manage and potentially discharge medical debts while keeping your assets intact.

Understanding Chapter 13 bankruptcy

Chapter 13 bankruptcy, also known as a wage earner's plan, helps individuals with regular income create a repayment plan for their debts.

This plan typically lasts three to five years and allows individuals to pay back all or part of their debts in a structured way.

Unlike Chapter 7 bankruptcy, which requires selling off assets to pay creditors, Chapter 13 lets you keep your property and catch up on overdue payments with a court-approved repayment plan.

Creating a repayment plan

The Chapter 13 bankruptcy repayment plan takes your financial situation, income, expenses, and the total amount of debt into account.

It allows you to consolidate your medical debts into a single monthly payment. By doing this, you streamline your finances, making it easier to manage payments and reduce the stress of dealing with multiple bills and collection calls.

The court approves the plan, ensuring it fits within your budget while helping you catch up on overdue payments and eventually pay off your debts.

Consider Chapter 13 bankruptcy for medical debt

By consolidating and reorganizing your debts, you can regain control over your financial future while protecting your valuable assets. If medical debt is causing you stress and uncertainty, it may be worthwhile to consider a Chapter 13 bankruptcy.