For many years, bankruptcy was one of those subjects that most people simply did not want to think about, much less talk about openly. Fortunately, that is changing, and this change couldn’t come a moment too soon. As public opinion about bankruptcy changes, more people recognize that living in the modern world is always a dangerous proposition, and bankruptcy is one of the great gifts that the law gives us when unexpected setbacks occur.
These days, one of the most common reasons to consider bankruptcy is overwhelming medical debt. It is no longer a controversial opinion that the cost of medical care in America is astronomical. Many of us live in fear that that, no matter how well things are going at any moment, an unexpected illness or serious accident can bury us in debt in an instant. Many people even avoid treatment that they desperately need because they don’t know how they’ll ever pay for it.
If you find yourself under medical debt that you cannot pay, it may be time to consider the relief that bankruptcy can offer. Once we look past needless stigma, which is thankfully fading away, it is easier to see just how life-changing a fresh financial start is.
Bankruptcy and debt discharge
It is important to understand that filing for bankruptcy does not “magically” make debt disappear, medical or otherwise. Under Chapter 7, a person may receive a significant discharge of their debt, but must typically sacrifice some portion of their personal property and accept strict boundaries around borrowing money for a period of time.
Under Chapter 13, a person with sufficient income may work out a structured repayment plan that a court approves, repaying their debt to several parties over a set period of time. Chapter 13 does not necessarily require sacrificing property, but does include similar restrictions against borrowing, in many cases.
Depending on your circumstances and the nature of your debt, you may qualify for one or both of these procedures. For those who owe a great deal in medical debt, this trade off is incredibly one-sided in their favor if used properly. A recent survey of Americans filing bankruptcy found that one out of every five undergo bankruptcy because of medical debt.
It is true that bankruptcy is often a difficult process, but in the long run it is often much better than avoiding filing.
Consider this — is any part of the bankruptcy process more costly or more likely to harm you than continuing to struggle under debt that you cannot pay? Medical debt can easily grow into hundreds of thousands of dollars for care that a person needs to continue living or resolve pain that makes every part of their lives difficult. Also, it may arise whether a person makes any other financial “mistakes” or not. For many suffering in this way, bankruptcy offers a fresh start when they most need one.
Protect your rights and recovery
If you are drowning in medical debt, refusing to consider bankruptcy is at least unwise and potentially very destructive. Those struggling to pay for the care they need are under immense amounts of stress, and that stress itself can lead to other larger medical issues.
A well-planned bankruptcy uses the strength of the law in Florida to offer those who fall on hard times an opportunity to start fresh and keep their rights and priorities protected while they recover, physically and financially.