A significant number of hardworking Americans are forced to live paycheck to paycheck. Whether it is due to the high cost of living, mortgage costs or mounting credit card debt, these individuals find it impossible to build any level of savings. In fact, unexpected financial difficulties can spell disaster for many people.
Without a substantial savings, even the smallest unexpected expense can lead to peril. From job loss and divorce to home repair and medical emergencies, individuals are usually only several hundred dollars from disaster. While various studies differ on the exact percentage, it is clear that medical-related expenses play a significant role in forcing many families into financial hardship.
Medical expenses can include:
- Surgical procedure
- Hospital stays
- Prescription medication
- Physical therapy
- Home accommodations
While bankruptcy can help individuals and families eradicate numerous instances of medical debt, each case is different. The guidance of an experienced legal professional is key to selecting the path that works best for your goals.
What are the common types of bankruptcy?
While the Bankruptcy Code goes to great lengths to provide numerous options for consumer bankruptcy, there are typically two common methods. Chapter 7 bankruptcy is also referred to as “debt elimination.” The overall process is generally shorter, and individuals will experience the discharge of all eligible unsecured debt. Unfortunately, it doesn’t always provide the best security for secured debts.
Chapter 13, however, is commonly known as “debt reorganization and repayment.” The repayment period lasts from three to five years and will see individuals pay a portion of their total debt over that time. At the successful completion of the repayment period, the remaining eligible unsecured debt is eliminated.
Do not hesitate to speak with an experienced bankruptcy lawyer who can answer questions and help you tailor a custom strategy to your unique situation.