Going through a serious illness or suffering a serious injury can turn a person’s life upside down. Dealing emotionally with a serious illness or injury can be challenging, and a person may simply want to do whatever it takes to regain their health. However, it won’t be long before medical bills start to pile up. Sometimes these bills can reach thousands or even tens of thousands of dollars. Many people in Nashua simply do not have the financial resources to absorb such expenses, and will soon find themselves facing overwhelming medical debt.

One option that might be helpful to people in such situations is filing for Chapter 7 bankruptcy. While you cannot “pick and choose” what debts to eliminate through bankruptcy, in general through Chapter 7 bankruptcy a person can have many of their secured debts, such as a mortgage, and unsecured debts, such as medical debt discharged. This is done by liquidating the debtor’s assets (with some exemptions), and then using the proceeds to pay back the debtor’s creditors.

However, to qualify for a Chapter 7 bankruptcy filing, a person must pass the “means test.” In general, Chapter 7 bankruptcy is an option for those whose income is under the state median income and is insufficient to cover the debtor’s reasonable and necessary expenses. If a person does not qualify for Chapter 7 bankruptcy, they may still have options. They could possibly pursue a Chapter 13 bankruptcy, also known as a wage-earner’s plan. In this type of bankruptcy, the debtor follows a court-ordered repayment plan over a period of three to five years. If they satisfy the repayment plan, once the repayment period is up, many of their remaining debts may be discharged.

Keep in mind that certain debts, such as past due child support or tax debt cannot be eliminated through bankruptcy. However, filing for bankruptcy can free up the resources needed to address these and other debts. And, for those facing overwhelming medical debt, it may be the answer they need to get back on firm financial footing.