Tennessee Bankruptcy Lawyer Advises on Medical Debt Discharge
Caring Knoxville attorney helps clients gain relief from medical bills
Two out of every three people who file a bankruptcy petition in the United States take that step because they are overwhelmed by medical expenses. At the Knoxville office of William E. Maddox, Jr. LLC, Attorney at Law, I advise Tennessee residents burdened by healthcare debt. Through Chapter 7 or Chapter 13 bankruptcy, you may be able to have a substantial amount of your debt discharged by a judge, allowing you to gain a clean slate for your finances and move forward with your life.
Accomplished debt relief law firm assists with medical bankruptcy petitions
Medical issues that lead to debt include not only the bills for medical care and procedures, but also unpaid time off work that people must take to undergo treatment and recuperate. An injury or illness can result in tens or hundreds of thousands of dollars’ worth of bills for surgery, hospital stays, follow-up procedures, physical therapy and medications. Even health insurance usually does not cover all of a person’s costs. This leads many people to exhaust their savings accounts and to sell their most valuable possessions.
While you may have concerns about bankruptcy, it may actually be more beneficial for you than bearing the heavy weight of your debt for years and trying to pay it back slowly. Tennessee’s bankruptcy exemptions could allow you to protect certain valuable property and the automatic stay could offer you much-needed relief from debt collection efforts. Most importantly, some or all of your debt could be eliminated entirely.
With a dedicated focus on debt relief and with more than 25 years of legal experience, I can provide a reliable assessment of whether medical bankruptcy could be a smart strategic move for you.
How bankruptcy can eliminate unsecured healthcare debts
During bankruptcy, a person’s available assets are used to pay back creditors based on a priority system. In Chapter 7 bankruptcy, your nonexempt assets are sold and the proceeds are distributed among creditors. Any dischargeable debt that remains after the bankruptcy trustee completes the distribution is typically cancelled, so you no longer have an obligation to pay it. In Chapter 13 bankruptcy, your disposable income is used to pay back creditors in accord with a personalized repayment plan that lasts for three to five years. Dischargeable debt left after you complete the payment plan is usually cancelled.
Medical debt is considered nonpriority unsecured debt. This means that hospitals, doctors’ offices, credit card companies and other entities to which you owe money for medical care are given lower priority than certain other creditors, such as the IRS. Because these types of debts are the last to be paid during bankruptcy, they are the most likely to be discharged.
If you do not have debts that would take priority over your medical debts, bankruptcy may not be the best way to lower or eliminate your debt. Medical creditors are often open to negotiating payment plans and amounts, so you may be able to lower your bills and create a more manageable financial situation by engaging in discussions with your creditor outside of court.
I have handled a wide variety of bankruptcy and medical debt relief cases during my time practicing law in Tennessee. After reviewing your circumstances, I can explain what debts are eligible for elimination and which type of bankruptcy would be appropriate for you.
Contact an experienced East Tennessee medical debt relief attorney for a free consultation
At the Knoxville, Tennessee firm of William E. Maddox, Jr. LLC, Attorney at Law, I help clients take strategic action to reduce and eliminate medical debt. To schedule your free initial consultation with my firm, call 865-672-8496 or contact me online.