Overcome Medical Debt with Bankruptcy in Killeen & Waco, Texas

Bankruptcy as a Solution to Medical Debt & for Individuals with Disabilities in Killeen & Waco, Texas

Overwhelming medical bills can be a serious financial burden. In fact, medical debt is one of the most common reasons that people file for bankruptcy. A study published in the American Journal of Public Health found that 66.5 percent of all bankruptcy cases were the result of medical issues, either because of how expensive treatment was or because the illness caused the patient to miss a significant period of work.

If you're struggling with medical debt, filing for bankruptcy may be the best way for you to regain your financial footing. Erin Baker Shank, P.C. and her Killeen & Waco bankruptcy law firm can help you evaluate your options and find the best option forward. 

Bankruptcy cases are the only focus at Erin's firm. She has four decades of experience helping Texans through the bankruptcy process. Get a free initial consultation by calling one of her offices or visiting the contact page today.

Understanding Bankruptcy for Medical Bills in Texas

There is not a separate form of relief called medical bankruptcy. However, you may be able to have your medical debts discharged in either a Chapter 7 or Chapter 13 bankruptcy filing. You cannot limit a bankruptcy filing to only deal with your medical debts. When you file for bankruptcy, all your debts must be included in your bankruptcy documents filed in your case. 

Qualifying for Chapter 7 Bankruptcy in Killeen & Waco

Before you can have your medical debts wiped out in bankruptcy, you'll have to see if you qualify. To be eligible for Chapter 7 bankruptcy and have your medical debts discharged, you will need to qualify under the bankruptcy means test.

The means test involves looking at your average income for the past six months and determining whether or not your income level is less than the median income for other Texas households of similar sizes. If your income is less than the median income for a similarly sized household, you are eligible to file for Chapter 7 bankruptcy. If your income is above the median level, you may still be qualified to file a Chapter 7 case. You may consider a Chapter 13 filing in this fact situation. However, due to the onerous requirements of Chapter 13 (wage garnishment, income tax refund garnishment, employer notification of the bankruptcy filing) Erin considers Chapter 13 as a last resort. She has non-bankruptcy solutions for individuals who don't qualify for Chapter 7 bankruptcy relief. Bankruptcy attorney Erin Shank, with virtual offices in Killeen and Waco, can help you determine the best way to address our financial challenges. 

Protecting Disability Benefits During Bankruptcy

One key area of concern when it comes to bankruptcy and medical debt is how filing for bankruptcy can affect your disability benefits. Fortunately, many disability benefits are protected from your creditors through our strong exemptions laws that are applicable in a bankruptcy case. Social Security benefits and VA Disability payments are exempt from the reach of creditors under federal and Texas law.