Can You Protect Your Assets During Medical Bankruptcy?
Medical bankruptcy is not a realistic term in the world of finance. However, bankruptcy that occurs due to medical problems is called medical bankruptcy. Health care is known to be one of the main reasons for bankruptcy in the United States of America.
Bothersome and costly medical problems have often found many well-off citizens in bankruptcy court. It is easy to see and understand that medical problems cause a double: they not only make a person unfit to work and earn a living, but also drain savings and rack up massive debt by racking up huge health care bills. Many people have no way to pay off this debt and therefore choose medical bankruptcy. Most of them are known to lose their homes and other valuables while trying to pay the health care bills.
Although many people feel that seeking bankruptcy is an undesirable option, it may be the only way to get out of all debt and rebuild a new life. One can see health insurance as a viable solution to avoid medical bankruptcy, but many of those who have opted for it had healthy health insurance when they got sick.
Another issue that comes up through research is that about half of medical bankruptcy cases didn’t have to go that way. They owed less than $5,000 in medical bills and could have arranged to pay the same in easier installments through negotiation. But, due to the more aggressive nature of collection in the medical industry and people ignoring all other options available to them, these cases have gone to the bankruptcy court.
Filing for Chapter 7 bankruptcy can certainly help protect one’s assets and would allow you to keep your home if it falls within the state’s guidelines. Although the rules and law vary from state to state, filing for bankruptcy may cause you major problems in the near future due to highly degraded credit ratings. It’s just smarter to look for other options than bankruptcy in these circumstances.
Calling a lawyer and getting advice could be a good option. But before you do, it would be wise to call your creditors and make some alternative payment plans. This could still save the day and keep you out of the messy business of bankruptcy. Talking to your creditors and negotiating all of your options could pave the way for new ideas and get you up and running again.
