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Today, the number one reason why people file for bankruptcy in America is expensive medical bills New data claims that unpaid mortgages and credit card bills are still problems that people who file for bankruptcy face, but medical bills have now passed even these types of debt.  Even people who have health insurance oftentimes find themselves wrestling with enormous bills that they cannot pay.  Medical expenses have been growing steadily over the past 50 years.  Once you are seriously injured, the holes in health insurance plans and the health insurance system in general become apparent.  If you have found yourself buried in medical debt, you should consider filing for bankruptcy.

One problem with medical insurance today is that it is generally sponsored by your employer.  If you are too ill or injured to work, your insurance might disappear.  While you have options if this happens, for example using getting an extended insurance coverage under COBRA, this can be expensive and your coverage will be limited.  The loss of income and medical insurance combined can make it extremely difficult to pay off expensive bills.  Even if you still have active medical insurance, you will end up paying a lot of money out-of-pocket due to co-payments and services that aren’t covered by your insurance.

The two main types of bankruptcy are Chapter 13 bankruptcy and Chapter 7 bankruptcy.  Either of these options could help you get back on your feet.  Chapter 13 bankruptcy is a type of bankruptcy in which you create a repayment plan in order to pay back your debt.  The repayment plan usually gives you three to five years to pay your debts off.  It puts a buffer between you and your debt by giving you more time to make payments without creditor harassment.  If you have a lot of unsecured and secured debt, or property-related debt (such as a mortgage), Chapter 13 bankruptcy might be a good option for you.

If you are looking to completely eliminate your medical bills, you can do this by filing for Chapter 7 bankruptcy.  Chapter 7 bankruptcy works to discharge your unsecured debt, including credit card debt and medical bills.  Chapter 7 bankruptcy is a good option, however, it is more difficult to file for Chapter 7 bankruptcy than Chapter 13 bankruptcy.  You will have to pass the means test that calculates your income, general expenses, and debt to determine your ability to pay off your debts.  If you can pay them off, you won’t be accepted for Chapter 7 bankruptcy and will have to file for Chapter 13 bankruptcy.

Facing enormous medical bills can be frightening.  While overcoming the physical and emotional trauma of your accident or illness, the last thing that you should be worried about is how you will pay your medical bills.  If you have accumulated a lot of debt as a result of medical treatment, keep in mind that you are not alone, and you do have options.  If you think that filing for bankruptcy is an option that you should explore, you can get free legal advice by contacting me about your situation.