In New Jersey and across the country, Chapter 7 bankruptcy is a viable option for many Americans who face overwhelming debt. In particular, medical debt is a mounting concern for people who have experienced serious illness and have inadequate medical insurance.
Medical Debt and Other Dischargeable Debt
According to a 2009 study published in The American Journal of Medicine, medical debt is a major reason for bankruptcy, and the frequency is rising. Because medical debt is unsecured, it can be discharged in Chapter 7 bankruptcy.
Most debt that is unsecured - that is, debt not backed up by collateral that can be seized by a creditor, like a car - can be discharged during Chapter 7 bankruptcy. When a debt is discharged, the debtor no longer needs to pay it back.
After the upheaval of a serious or lengthy medical battle that brings on a heavy financial burden, Chapter 7 bankruptcy may be the relief that helps the debtor turn the corner.
Non-Dischargeable Unsecured Debt
Not all unsecured debt is dischargeable in Chapter 7 bankruptcy. Debts that typically may not be discharged include student loans, child support, alimony and taxes.
For people whose most substantial debt comes from medical bills, however, bankruptcy could be a solution.
Speak With an Attorney
Chapter 7 bankruptcy can be appropriate for consumers who have significant unsecured debt. Although new bankruptcy laws came into effect in 2005, making bankruptcy less attainable for a small number of people, the majority of potential filers are unaffected.
If you find that medical bills or other debts seem insurmountable, speak with an experienced New Jersey bankruptcy attorney to discuss your options. Whether or not Chapter 7 bankruptcy can ease the burden, it is important to be aware of your rights and choices.
