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Though many are embarrassed by it, most Americans are in debt. For many, sustaining an injury or illness can often be the cause of mass amounts of debt, even if they have insurance.  As such, it’s essential to ensure you understand what will happen to your medical bills if you want to file for bankruptcy with the assistance of a Memphis, TN medical debt lawyer. Keep reading to learn what you must know about these circumstances.

What Is a Dischargeable Debt?

A dischargeable debt can be forgiven when a person completes the bankruptcy process. Once a debt is discharged, the debtor is no longer legally liable for making a payment on that debt. Because the debtor no longer has a legal obligation to make payments, a debt collector can no longer pursue the debtor.

Most dischargeable debts are personal, like credit card bills or personal loans. Some debts, like funds owed for child support or alimony, are not dischargeable, and you will remain liable for the funds you owe.

What Will Happen to My Medical Bills?

If you file bankruptcy, your medical bills can be forgiven during this process. Generally, you must take an assessment to determine which type of bankruptcy you qualify for. The most common choices are Chapter 7 and Chapter 13. Those who pass the Chapter 7 means test must make less than the median income for their area to qualify. As such, this will liquidate your assets and pay back a portion of your debts. What remains after the liquidation will be forgiven.

Those who make more than the median income will file Chapter 13 bankruptcy. This process involves creating a repayment plan that lasts three to five years. Once the plan is finished, the remaining debt is discharged.

What Should I Do if I’m Considering Bankruptcy?

Filing bankruptcy is not a decision that should be made lightly. Though there are many benefits to this process, like wiping out debt, receiving a financial fresh start, and putting an end to creditor harassment, this will impact your credit for years afterward. Chapter 7 will remain on your credit report for ten years, while Chapter 13 will remain for seven years.

As such, it’s imperative to discuss your options with a dedicated attorney. Unfortunately, bankruptcy is a complex process, laden with documents and strict deadlines. Ensuring you have an attorney to assist you during this process is critical to guiding you through this complicated process to give you the best chance at receiving a fresh start.

At the Arnold Law Firm, it’s our goal to ensure you understand your options so you can feel confident making the best decision for your needs. We know medical bills can be astronomical and quickly leave you drowning in debt. As such, we will do everything possible to assist you through these complex matters. Contact us today to discuss your circumstances with a member of our legal team.