Wipe Out Medical Bills

Medical bills can pile up quickly and cause stress and financial hardship. For many in Tacoma and Pierce County, managing high medical expenses can be overwhelming. Fortunately, there are legal options to help you regain control over your finances, including bankruptcy. Navigate this complex process and ensure your rights are protected with the help of Tacoma bankruptcy attorneys.

In Tacoma, as in other places around Washington, medical bills can become a big burden for residents. Unforeseen health issues, surgeries, or long-term treatments can leave you with mountains of medical debt that could take you years to pay off. Here are some of the more common reasons this debt might be overwhelming:

• High Out-of-Pocket Costs: Even with insurance, you might have high deductibles, co-pays, and uncovered services.
• Uninsured or Underinsured: Not having insurance at all or having inadequate coverage might leave you struggling to pay large medical bills.
• Emergencies: Unexpected medical emergencies can result in costly hospital visits and treatment that you didn’t plan for financially.

When medical bills become unmanageable, you might consider bankruptcy a potential solution, a way for you to reduce or eliminate your debts and have a fresh start. Two main types of bankruptcy might apply to you.

Chapter 7 bankruptcy is a common solution when you have a ton of medical debt, as it allows for the discharge of unsecured debts, such as medical bills, credit card debt, and personal loans. This means that after the bankruptcy process, you may no longer be legally responsible for the debts included in the filing.

• Eligibility: To qualify for Chapter 7 bankruptcy, you must pass the means test, which evaluates your income and expenses. If your income is below the median income for your household size in Washington State, you may be eligible.
• Debt Discharge: Once Chapter 7 bankruptcy is approved, most unsecured debts, including medical bills, are typically discharged.
• Property Considerations: While your debts may be discharged, some assets may be sold to pay your creditors, depending on the exemptions allowed in Washington State.

Chapter 13 bankruptcy involves a repayment plan that allows you to keep your property while making affordable monthly payments over 3 to 5 years. This option is beneficial if you have a stable income but need assistance paying off your medical debt over time.

• Eligibility: Chapter 13 is available as long as you have regular income coming into the household and can commit to a repayment plan.
• Debt Restructuring: Unlike Chapter 7, Chapter 13 doesn’t discharge debts immediately. Instead, you work with the court to establish a repayment plan for medical bills and other debts.
• Debt Prioritization: While medical bills may be treated as unsecured debts in Chapter 13, they are included in the repayment plan alongside other types of debt, such as credit cards and personal loans.

The laws that govern medical debt in Pierce County, including Tacoma, are based on both federal and state statutes. Several exemptions are available to you in Washington bankruptcy cases, allowing you to protect certain assets from being sold.

• Homestead Exemption: In Chapter 7 bankruptcy, you may be able to protect your home’s equity up to a certain value.
• Personal Property: Certain types of personal property, like vehicles or household items, may be exempt from liquidation under state law.
• Retirement Accounts: Many retirement accounts are exempt from creditors during bankruptcy proceedings.

You should work with a Tacoma bankruptcy attorney who can help you understand which exemptions apply to your situation.

Residents of Tacoma and surrounding areas are subject to bankruptcy laws administered through the Western District of Washington Bankruptcy Court. In Pierce County, filings are processed through this district. Bankruptcy attorneys familiar with Pierce County’s court system can help you navigate these proceedings more efficiently.

Our skilled bankruptcy attorneys in Tacoma can help you understand if bankruptcy is the right option for you. We can also ensure that all of your medical bills are included in the bankruptcy filing and then guide you through the entire process.

Dealing with medical bills can be stressful, but bankruptcy offers you some relief. So, don’t hesitate to reach out to a bankruptcy attorney who can help you navigate the process, run through all your options, and ensure your rights are protected.

Medical bills are easily discharged in bankruptcy. They have to share with other general unsecured debt, such as credit card debt and signature loans, if any money is available to pay them in the bankruptcy process. In most Chapter 7s there is no money available for medical bills because there is no property taken to pay creditors. In Chapter 13s, general unsecured creditors are last in line to be paid and only get whatever percentage the debtor can afford.

It does not matter how long before filing bankruptcy that you got the medical care, or whether you made any payments. The most important thing is that the medical care took place before you filed bankruptcy for it to be discharged. You don’t have to receive a bill before you file to discharge the debt.

Many people who are discharging medical debt worry that they won’t be able to see a favorite doctor after filing bankruptcy. That is up to the doctor. Most larger clinics or hospitals do not punish people for having to file bankruptcy. If you want to pay a doctor, it’s best to wait until after your discharge. There’s nothing wrong with paying a discharged debt voluntarily, but if you show favoritism toward a certain creditor before you file, the creditor could be sued by the trustee and have to turn the payment over to spread around fairly to the rest of the unsecured creditors.

One thing to consider is that if a medical debt is for an injury, any recovery for that injury in a lawsuit or otherwise could be property that needs to be turned over to the trustee. There is a personal injury exemption available to protect some of it. Your wild card exemption can be used as well. The law suit does not need to be filed before you file bankruptcy for the trustee to take it over. If you have a lot of medical debt, you will be asked by the trustee if you can sue someone for an injury and you have to tell the truth. You should discuss plans to file bankruptcy with your personal injury attorney and you should tell your bankruptcy attorney about any injuries you could sue someone for.

Contact the bankruptcy lawyers in Tacoma, Washington to discuss your options for getting rid of medical bills with a bankruptcy.