You may have heard that someone used the term "medical bankruptcy." This is a term that people often use. They are either experiencing a medical-related financial crisis or are familiar with people facing serious medical debt. Although medical bankruptcy is not a legitimate term, it is a useful term to describe financial relief for individuals whose medical debt may have reached the ropes.
Medical banks may be a misleading term because there is no legal remedy specifically for medical debt. In general, bankruptcy refers to the partial or complete dissolution or reorganization of an individual or part of a debt. When you apply for any type of bankruptcy, you must include all debt. This will apply to home mortgages, car loans, credit cards and medical debt. There are several types of bankruptcy, but most people who file for bankruptcy medical debt usually file for bankruptcy Chapter 7 or Chapter 13. Chapter 7 bankruptcy may allow individuals to eliminate their debts, while Chapter 13 bankruptcy allows individuals to restructure their debt into a 3-5 year plan while reducing debt principles.
The idea that medical bankruptcy exists as a legal remedy may have evolved because the court deals with medical debt in a different way than other types of debt. Not all debts will receive the same treatment in court. Bankruptcy courts usually classify individual debt into two categories: secured debt or unsecured debt. A secured debt is a type of debt that is usually associated with assets such as auto loans or home mortgages. Unsecured debt is usually not related to assets, but can usually be eliminated or severely reduced through bankruptcy. It is important to recognize that medical debt is often classified as unsecured debt.
Although the term "medical bankruptcy" is not a legal term, it is a useful way for individuals to describe how their financial situation is in chaos. Experienced bankruptcy attorneys will immediately understand the needs of clients when they ask for medical bankruptcy. Bankruptcy lawyers can tell them how bankruptcy can solve their financial hardships due to medical debt, and even help individuals decide whether Chapter 7 or Chapter 13 is best for them. Once the individual has decided on the best course of action, the lawyer will successfully file a lawsuit and go bankrupt through legal proceedings.
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Orignal From: Medical bankruptcy: Is the fact still fictitious?
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