For individuals who are struggling with medical debt and oftentimes related credit card debt, there may be options to consider to help enjoy a fresh financial start and be free of the stress associated with overwhelming debt. Sometimes a vicious cycle of medical debt and credit card debt can lead to falling behind in medical bills and credit card bills.
Fortunately, personal bankruptcy options are available for individuals struggling with debt, including medical debt and credit card debt. Because medical debts and credit card debt are considered unsecured debts, it is important to be familiar with the ways that personal bankruptcy may help. Initially, after filing a petition for bankruptcy, an automatic stay goes into effect that prevents creditors from pursuing further collection actions or initiating new collection actions.
There are generally two types of personal bankruptcy options, and both can help with medical bills and credit card debt. Chapter 7 bankruptcy is considered a liquidation bankruptcy that allows individuals who qualify to liquidate non-exempt assets to repay debts. On the other hand, Chapter 13 bankruptcy allows individuals who qualify to reorganize their debts and repay them in a more manageable manner. Either option can help individuals struggling with debt obtain debt relief.
It is important to understand which type of bankruptcy option may be best for you. The best bankruptcy option can depend on your circumstances and your needs and goals for the bankruptcy process, so it is useful to be familiar with the options available which both help struggling individuals become free of overwhelming debt burdens and the stress associated with them.