Chapter 7: Bankruptcy Medical Bill Protection
Medical bills are the most common reason people seek bankruptcy. However, it is possible to seek protection against bankruptcy medical bills because hospital bills are considered unsecured debts. A Chapter 7 bankruptcy is perfect in the sense that it is the fastest and the debtor can walk away with only a few scratches and cuts, particularly some property not covered by the exemption and their overall credit score, which can affect their ability to to secure future loans.
Bankruptcy medical bills could be the best thing you can do to restart your financial future with a clean slate. There is a certain stigma to filing for bankruptcy, but it is actually a very personal matter. Your privacy is protected and you can still get on with your life instead of the misconception that you leave with only your clothes on. In some cases, you can even keep your car in bankruptcy.
What happens is that the court appoints a trustee who will inventory your properties, determine which are exempt, and sell those that are not. The money raised from the sale will be used to pay off your creditors. To find out which properties are exempt from Chapter 7 bankruptcy, talk to an experienced bankruptcy attorney. Some examples of property covered by exemptions are: your home, tools or equipment you use in your profession, social security, disability or unemployment benefits, or life insurance. There may be some additional exemptions depending on state laws.
After you file bankruptcy, the court orders creditors to stay away. But the law also allows creditors to show that they are justified in collecting your debt, however the burden of proof falls to their side. However, bankruptcy will not eliminate all your debts. Any ties you owed before the medical emergency remain on record and must be paid off in due time.
Filing bankruptcy medical bills will not automatically exempt you from paying the IRS. There are conditions before the federal tax agency will release you. Again, consult a bankruptcy attorney to explain all the gradations of the law regarding Chapter 7 bankruptcy medical bills. He may be able to protect himself from his creditors, but he can’t get away from the IRS. Federal agents can still step in even after bankruptcy and seize your property, but only if they decide you’re trying to run away from liability as a taxpayer.