If your debts are too high but pride prevents you from seeking protection under Chapter 7 bankruptcy, Chapter 13 may be the option for you. While Chapter 7 lets you start with a clean slate, Chapter 13 is a court-supervised payment plan. If you are in an income category or if you are currently unemployed, the court will also allow you to pay only a portion of the total medical debt. Most people who file Chapter 13 have much higher income than Chapter 7 allows.
The repayment period under Chapter 13 bankruptcy is around 3-5 years. One advantage is that you can keep your nonexempt property, which would have been sold to pay off creditors under Chapter 7 procedures. People who are filing for Chapter 13 have one thing in common:
- They want to pay their medical bills but their current situation doesn’t allow it.
- Due to their medical bills, they are behind on their mortgage or auto loan payments.
- You already filed for Chapter 7 bankruptcy last year or seven years ago. You can only renew your Chapter 7 application after eight years.
There are other requirements for filing Chapter 13 bankruptcy medical bills, but an attorney will be able to better explain the limitations and benefits of the procedure. For example, you can’t file Chapter 13 if your debts were paid off more than two years ago. Filing medical bills for bankruptcy also does not automatically eliminate taxes, alimony, child or spousal support, student loans, or criminal and civil liabilities.
It’s important to consider all of your options and think about the pros and cons of filing for Chapter 13 or Chapter 7 bankruptcy. Don’t make a decision without first consulting with your family, friends, co-workers, and attorneys. Remember, you will end up dealing with the consequences of your actions, so no matter how valuable your notices are, the decision of whether or not to file for bankruptcy ultimately rests with you.