GET HELP TODAY
Many Raleigh residents suffered tremendous loss due to COVID-19. Thousands lost their jobs, businesses closed, and even more faced costly medical bills from the virus. If you’re struggling to pay off hospital debt from COVID-19, you might be wondering if Chapter 7 bankruptcy can help.
The answer is yes, filing for Chapter 7 bankruptcy in Raleigh can wipe out most – if not all – of your hospital bills.
In fact, bankruptcy laws were created precisely for situations like this. To understand why, let’s discuss how medical debt is treated in bankruptcy.
Medical Debt is Considered “Non-Priority” Unsecured Debt
In bankruptcy, there are two types of unsecured debts: priority and non-priority. Priority unsecured debts must be paid first, while non-priority unsecured debts can be discharged (wiped out) completely.
So why do some debts get priority over others?
According to the courts, not all debts are created equal. Some debts deserve priority because they’re in the interest of the overall public good or owed to the government – like certain taxes. Others get priority because they’re for the benefit of dependent individuals.
Examples of priority debts are:
- Alimony or spousal support
- Child support
- Certain income taxes
- Sales taxes
- Payroll taxes
- Criminal fines
- Wages owed to employees
As a result, most priority debts cannot be discharged through bankruptcy. You’ll still have to pay them back even after going through a Chapter 7 case.
Other types of debt don’t get this special treatment. This includes general, unsecured debts – like credit card balances and medical bills.
Medical debt is especially common among Raleigh residents. With the outbreak of COVID-19, many people have faced skyrocketing medical bills – sometimes totaling in the tens of thousands of dollars.
If this applies to you, we understand how crushing it can be. Health issues are stressful enough without the added financial burden. That’s why Attorney Weik is particularly passionate about helping our clients get out from under this type of debt.
How to Get Rid of Medical Debt in Raleigh Through Bankruptcy
The elements of a Chapter 7 bankruptcy are largely the same regardless of the type of debt you’re dealing with. Here are some of the things you can expect during the process:
Taking the Means Test
Before you can discharge your hospital debt through Chapter 7 bankruptcy, you must first pass something called the Means Test. It’s designed to see if your income is low enough to qualify for this type of bankruptcy.
The Automatic Stay
Being chased by creditors and debt collectors is one of the most stressful aspects of having unpaid medical bills. But when you file for Chapter 7 bankruptcy in Raleigh, an automatic stay goes into effect. Essentially, this means your creditors must stop all collection attempts – including phone calls, letters, and wage garnishments.
Filing Your Bankruptcy Petition
The next step is filing your bankruptcy petition. This document lists all of your debts, assets, and income. We highly recommend talking to a Weik bankruptcy attorney before officially filing your petition. One wrong move could jeopardize your entire case.
Other steps, like attending the 341 meeting, will be explained to you in detail by Attorney Weik.
Focus on Getting Better While We Help You Get Out of Debt
Dealing with a major illness is hard enough – the added stress of medical debt can make it nearly impossible to fully recover. If you’re struggling to pay off hospital bills from COVID-19, know that you have options.
Call Weik Law Office today at 919-845-7721 for a free consultation, and set up a time to speak with one of our friendly professionals.