Unexpected life challenges such as the loss of a job or medical expenses can result in debt that only adds stress to the lives of individuals who may already be struggling. Relief from debt and a fresh financial start can be available through bankruptcy options. There are two primary personal bankruptcy options to consider including Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy.
Mounting medical expenses can leave an individual who is struggling with their health behind and in a position that can feel hopeless and as though they may never be able to catch up on the medical bills they face. Chapter 7 bankruptcy is one bankruptcy option to consider which allows the filing party to liquidate assets to repay creditors, while protecting certain categories of property referred to as exempt property. Medical debt is considered unsecured debt which can likely be discharged during the Chapter 7 bankruptcy process.
In addition, once the personal bankruptcy filing has been made, the filing party will enjoy the automatic stay placed by the court with prevents further creditor collection actions during the bankruptcy process. While the bankruptcy process may seem intimidating at first, it does not have to be. There are different options for individuals in different situations and it is important to explore and understand what those different options are.
Depending on the goals and needs of the party considering bankruptcy protection, different options may be available and may be a better fit than others. As long as the filing party understands the different legal options and protections available to them, they can select the one that is best for them and work towards enjoying a debt-free life and fresh financial start.