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Disposing of medical debt through Chapter 7

Health problems do not discriminate based on income or insurance coverage, leaving many in Florida with enormous medical debt that they are unable to pay. If one is in a position where paying back medical bills has become impossible, declaring Chapter 7 bankruptcy may be an option to consider. While not all people qualify for Chapter 7, and some have too many assets to be a good candidate, in Florida many are able to dispose of medical debt through bankruptcy.

Because Chapter 7 allows a person to wipe out most unsecured consumer debt, which includes unpaid medical bills and other debts that have no collateral, there are financial benchmarks in place to determine who qualifies. The first step, according to NerdWallet, is passing the means test. This test documents all of the income from the previous six months to determine whether or not someone makes below the state’s median income. This number is based on the number of earners in a household. If the income falls below this amount, people are qualified for Chapter 7 bankruptcy.

Many people worry that declaring bankruptcy will make them lose all of their possessions--in fact, this is Money Magazine’s top bankruptcy myth. State laws vary on which assets are able to be maintained in Chapter 7, and it is not the correct option for everyone. Many people believe that repaying the debt is the best option, and it clocks in as myth number three, but sometimes that is just not a realistic option. If medical bills have piled up so high that there is not a route to paying them off in several years, Chapter 7 may be the best path to long-term financial health.  

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