Medical Debt Attorney in Hackensack, New Jersey

Medical debt is often an overwhelming burden that can impact your financial stability and overall well-being. The rising costs of healthcare and unexpected medical emergencies can often leave you in a precarious financial position. For those struggling to manage mounting medical bills, understanding the legal solutions available, such as Chapter 7 and Chapter 13 bankruptcy, can provide a pathway to relief.  

Located in Hackensack, New Jersey, The Law Office of Marc G. Alster serves clients across northern and central New Jersey, including Bergen, Passaic, Hudson, Essex, Union counties, and parts of New York such as Rockland, Westchester, Orange, and Putnam counties.

Mr. Alster's extensive experience in Chapter 7 and Chapter 13 bankruptcy provides a reliable resource for those seeking debt relief. Reach out to his firm today to schedule an initial consultation.

The Impact of Medical Debt on Credit, Finances, and Future

When medical debt becomes insurmountable, it can affect more than just your bank account. It can tarnish your credit score, hinder your ability to secure loans, and create a cycle of financial distress.  

Unpaid bills often lead to collections, which can stay on your credit report for years, making any future financial endeavors challenging. Beyond immediate credit impacts, the stress of debt can also impede your long-term financial planning and stability.  

Addressing medical debt promptly through bankruptcy can mitigate these impacts. By consulting with Mr. Alster, you can better understand how filing for bankruptcy might improve your financial outlook. 

Chapter 7 & 13 Bankruptcy as Solutions to Medical Debt

Bankruptcy offers a structured and legally recognized method for you to manage insurmountable debt. Two common types of personal bankruptcy are Chapter 7 and Chapter 13, each offering distinct advantages for handling medical debt. 

How Chapter 7 Bankruptcy can Resolve Medical Debt 

Chapter 7 bankruptcy, often referred to as "liquidation bankruptcy," provides a way to discharge most unsecured debts, including medical bills. This process involves selling non-exempt assets to pay off creditors, offering a fresh financial start for qualified individuals. However, it's important to realize that over the past 30+ years not a single one of Mr. Alster's hundreds if not thousands of Chapter 7 clients have involuntarily lost an asset through filing for Chapter 7 protection without first being made aware by Mr. Alster that an asset might be put at risk of being sold by 8 Chapter 7 Trustee.

This is because Mr. Alster personally and very specifically guides his clients through the eligibility requirements for Chapter 7 protection to assure that each of his clients thoroughly understands the process, including the possibility that the Bankruptcy Code EXEMPTIONS may be insufficient to protect one or more material assets(see another article in this website entitled "EXEMPTIONS"). Mr. Alster's goal is always to help clients alleviate their general unsecured debt while protecting their essential assets, enabling a return to financial health and well-being. 

How Chapter 13 Bankruptcy Can Resolve Medical Debt

For those who may not qualify for Chapter 7, Chapter 13 bankruptcy presents an alternative. Known as "reorganization bankruptcy," Chapter 13 allows you to keep your property while repaying debts over a three to five-year period based on your income. 

Under Mr. Alster's guidance, you can develop a manageable repayment plan that addresses your medical debt without the immediate liquidation of assets. This approach provides structure and predictability, helping clients regain financial control. 

Eligibility for Chapter 7 or Chapter 13 Bankruptcy

Means Test for Chapter 7 

Eligibility for Chapter 7 bankruptcy involves passing a means test, which assesses income relative to the median income in the state. If your income is below the median, then you may qualify for Chapter 7 relief. However, if you don’t pass the means test, then you will be limited to Chapter 13 bankruptcy.  Fortunately, in New Jersey, the vast majority of debtors do not have a problem passing the Bankruptcy Means Test.

Repayment Plan for Chapter 13 

Chapter 13 relief requires monthly payments over a five-year period to repay at least 25% of the unsecured debt owed at the time of filing. For Chapter 13, the debtor must have a regular income to support a repayment plan. This type of bankruptcy is ideal for those who have significant assets they wish to protect while still managing their debt. 

How a Bankruptcy Attorney Can Help

A bankruptcy attorney can evaluate your circumstances and advise you on the most suitable form of bankruptcy. They can guide you through the eligibility criteria, documentation, and legal processes. With a thorough understanding of bankruptcy laws, an attorney can help you understand your rights and options.  

Mr. Alster offers personalized consultations to assess your situation and recommend the most appropriate action. His detailed understanding of Chapter 7 and Chapter 13 bankruptcies gives you comprehensive support tailored to your needs. With Mr. Alster's assistance, you can confidently approach the bankruptcy process, knowing you have an advocate dedicated to achieving the best possible outcome. 

Frequently Asked Questions About Medical Debt and Bankruptcy

Will filing for bankruptcy stop collection calls and lawsuits? 

Yes, filing for either Chapter 7 or Chapter 13 bankruptcy invokes an automatic stay. This legal provision immediately stops all collection activities, including calls, letters, and lawsuits. The automatic stay provides much-needed relief from the stress of persistent creditor actions, allowing the debtor to focus on the bankruptcy process. 

The automatic stay remains in effect throughout the bankruptcy proceedings, offering continued protection until the discharge or completion of the repayment plan, unless a creditor files a Motion (which is a formal request to the Bankruptcy Court) and receives an Order from the Bankruptcy Court lifting the automatic stay.  This action by a general unsecured creditor is very rare in a regular Chapter 7 Bankruptcy proceeding.

How will bankruptcy affect my credit score? 

Filing for bankruptcy does have an initial impact on credit scores, as it remains on the credit report for up to ten years (following a Chapter 7 Discharge) or seven years (following a Chapter 13 Discharge). However, for many, the benefit of eliminating insurmountable debts outweighs the temporary dip in credit score. In most cases, Mr. Alster's clients have a significantly higher credit score on file with the 3 national credit reporting agencies one year after receiving their Bankruptcy Court's Discharge Order than their scores at the time of filing for bankruptcy protection. 

Over time, individuals can rebuild their credit by managing finances responsibly (see the other article in this website entitled "Receipt of the Bankruptcy Court's Discharge Order and the REBUILDING OF YOUR CREDIT"). Most clients can improve their credit scores significantly post-bankruptcy through the Discharge of their old debts, and establishing a positive payment history going forward, post-bankruptcy. 

What assets can I keep in bankruptcy?

Exemptions in Chapter 7 

In Chapter 7, certain assets are considered exempt from liquidation, meaning the debtor can keep them - i.e., they are rendered safe from the Chapter 7 Trustee, who is appointed by the Bankruptcy Court, attempting to sell the asset. These exemptions vary by state but often include essentials like the limited equity Chapter 7 debtor(s) may have in their primary residence, regular/run-of-the-mill personal items, household furnishings, tools of the trade, etc.  Also see information on this subject in the paragraph entitled "How Chapter 7 can Resolve Medical Debt", above

Protection in Chapter 13 

Chapter 13 allows debtors to retain their assets while repaying debts according to a court-approved plan. This includes property that might otherwise be at risk in Chapter 7. 

For those grappling with medical debt, bankruptcy can offer a structured path to financial recovery. Understanding how Chapter 7 and Chapter 13 bankruptcies can help alleviate medical debt burdens. To explore these options further, contact The Law Office of Marc G. Alster.  

Reach Out for Legal Support 

For those in New Jersey struggling with medical debt, don’t hesitate to reach out to The Law Office of Marc G. Alster to explore bankruptcy options and regain financial stability. Whether you’re in Bergen, Passaic, Hudson, Essex, or Union counties, New Jersey, or in Rockland, Westchester, Orange, or Putnam, New York, schedule a consultation today to discuss personalized solutions and embark on the path to debt relief. 

By addressing your medical debt through structured bankruptcy processes, you can find relief and move toward a more stable financial future.  Asset might be at risk than