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Bankruptcy Law Blog

Monday, May 18, 2020

What Happens to Your Medical Bills When You File for Bankruptcy?

According to AL.com, Alabama residents who contract the coronavirus can expect to rack up hospital bills somewhere in the $20,000 to $240,000 range. This is an unpayable amount of debt for most people, particularly when you consider 21% of Alabamians already have a healthcare-related bill in collections.

Instead of struggling to pay off this debt, and letting it control your quality of life, why not consider filing for bankruptcy? Since 1978, the Padgett & Robertson team has been helping people in the Mobile area who are saddled with medical debt file for bankruptcy and get a fresh start.

A Clean Slate

Medical debt is not like debt tied to an object like a house or a car that can be repossessed by your lender. There is no collateral that your creditor can take away from you if you do not pay your medical bills. Your doctor is not able to take back the treatment you have already received or even stop caring for you just because you have not paid your bills. This means medical debt is what is known in the financial and legal worlds as an unsecured debt.

Unsecured debt is the best kind of debt to be in if you are considering filing for bankruptcy. Debtors who file for bankruptcy under Chapter 7 of the bankruptcy code have the most unsecured debt forgiven. This includes medical debt and credit card debt.

If you file for Chapter 13 bankruptcy, you will be put on a repayment plan and you may end up paying back all the medical debt that you owe over a period of years. However, it is likely that some of it will be forgiven.

What if the Debtor has Died?

The coronavirus is causing a heartbreaking number of deaths, and the loved ones of those who have passed away are being asked to pay the related medical costs.

When trying to determine if a loved one is responsible for paying off a deceased person’s debt, the first thing to do is check the paperwork. Spouses or other relatives who co-sign financial documents are generally held responsible for each other’s debts.

However, state law often trumps contracts. Some laws forgive debts incurred by a spouse, while others make it clear that a surviving spouse must pay up. This is why it is important to talk to an experienced attorney before agreeing to take on a loved one’s debt. You don’t want to start paying a debt off, and then be held responsible for it because you have shown you are willing to pay.

Don’t Let Medical Debt Ruin Your Life

Living during this coronavirus pandemic has been challenging enough. Don’t add to your worries by struggling to pay off mountains of medical debt. If you are being asked to pay an unrealistic amount of money, it is time to speak with an experienced bankruptcy attorney. The attorneys at our firm can help you figure out what your options are, and put you on the right path to move forward. Please contact us today to schedule a free initial consultation.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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| Phone: 251-342-0264

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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”