COVID Medical Expenses and Discharges Medical Bills in Chapter 7 Bankruptcy
Millions of Americans are experiencing significant financial difficulties as a result of the pandemic and are considering bankruptcy. This is including individuals and small business owners in the Tampa Bay area. For many Tampa-area residents, financial problems are compounded by illness due to COVID-19. To be sure, a large number of people in Florida and across the country are currently grappling with medical debt while trying to recover from the coronavirus and its lingering effects. According to a recent report from CNBC, even insured Americans are learning that their COVID-19 medical bills are extremely high, and uninsured people are contending with tens of thousands of dollars in medical bills.
To be clear, COVID-19 medical expenses can be substantial, and many Americans cannot afford to pay those bills. If you have medical debt, you should know that you are not alone. Chapter 7 bankruptcy might be an option for you to discharge that medical debt so that it does not need to be repaid. An experienced Tampa bankruptcy lawyer can speak with you today about your options.
Medical Debt is a Common Reason for Consumer Bankruptcy
Medical debt is one of the leading reasons for consumer bankruptcy filings in the U.S., particularly Chapter 7 bankruptcy cases. According to CNBC, health insurance is not usually enough to protect people from high medical bills, and the Affordable Care Act has not eradicated the problem of crushing medical debt. As such, it should not come as a surprise that nearly 67 percent of all consumer bankruptcy cases are linked to medical bills and health issues. Every year in the U.S.—not including data from the pandemic, which will likely lead to a rise in this figure—about 530,000 Americans file for bankruptcy as a result of medical bills.
Given that the coronavirus pandemic is causing serious health issues for millions of people, leading to hospitalizations and other types of costly care, even more people are now suffering from medical debt.
Chapter 7 Bankruptcy Can Allow You to Discharge Medical Debt
While news of increasing medical costs and debt due to COVID-19 circulates, it is important for debtors in the Tampa Bay area to know that you will likely be able to discharge medical debt in a Chapter 7 bankruptcy case. To be sure, medical debt is not in the categories of debt that are difficult or impossible to discharge. Medical debt—from hospital bills to doctor’s office visits and physical therapy costs—can be discharged in Chapter 7 bankruptcy cases much more easily than certain other types of debt. In addition, medical debt is almost always considered unsecured and non-priority.
In order to be eligible for Chapter 7 bankruptcy under the U.S. Bankruptcy Code, you will have to pass what is known as the “means test.” The means test looks at your assets and income to determine whether a liquidation bankruptcy would be abusive. If you earn too much money, you will not be eligible for Chapter 7 bankruptcy. Instead, you may need to file for Chapter 13 bankruptcy. While you can still handle medical debt in a Chapter 13 bankruptcy case, the debt will not be discharged immediately as it can be in a Chapter 7 case. To determine whether you are eligible to file for Chapter 7 bankruptcy and to discharge your COVID-19 medical debt, you should get in touch with an experienced bankruptcy lawyer in Tampa who can help.
Contact a Tampa Bankruptcy Attorney Today
Bankruptcy law is complicated, but an experienced Tampa Chapter 7 bankruptcy attorney can assist you with your bankruptcy filing from start to finish. If you have medical debt due to COVID-19, you may be able to file for Chapter 7 bankruptcy in order to have your medical debt discharged. Do not hesitate to get in touch with our firm to learn more about how we can assist you. Contact Samantha L. Dammer today for more information.