Medical debt can quickly become overwhelming, especially when unexpected illnesses or injuries occur. If you have large medical bills in Massachusetts, understanding your options is important.
Chapter 7 bankruptcy for debt relief
Chapter 7 bankruptcy is one option that may help you manage large medical debts. This type of bankruptcy can discharge many unsecured debts, including medical bills. To qualify for Chapter 7 bankruptcy, you must pass a means test that evaluates your income and expenses. If you qualify, you may have to sell non-exempt assets to pay off creditors.
Chapter 13 bankruptcy for structured repayment
Chapter 13 bankruptcy is another option, which allows you to keep your property while repaying debts through a structured plan. This plan typically lasts three to five years and depends on your income. You’ll include medical debts in the repayment plan, and once you complete it, the remaining eligible debts get discharged.
Exemptions and protections
Massachusetts law provides certain exemptions that can protect your assets during bankruptcy. For example, you may be able to protect your home, car, and retirement accounts up to certain limits. These exemptions help ensure that you can maintain a basic standard of living while dealing with your debts.
Exploring alternative options
Before deciding on bankruptcy, it might be worth exploring other options for managing medical debt. These can include negotiating with healthcare providers for a payment plan or seeking assistance from nonprofit credit counseling services. Sometimes, hospitals and medical providers have financial assistance programs for those who qualify.
Moving forward with financial stability
Navigating large medical debts can be challenging, but understanding the tools available can empower you to make informed decisions. Focusing on financial education and budgeting can also be beneficial as you work towards a more secure financial future.