Friday, May 1, 2009
MEDICAL BANKRUPTCY
From the recent past years, it is seen that the medical bankruptcy cases increased dramatically. In some of the states of United States, the incidence of medical bankruptcy is up by 300%. A person will be called a medical bankrupt if tat person spent twenty-five percent of his or her total income on medical bills, which are not paid. Even if a person is not attending his or her work place for four weeks or more at a stretch due medical disorders of that person or due to some illness of his or her relative then also he or she will be called medical bankrupt.
Medical Bankruptcy Fairness Act (2008)
The Medical Bankruptcy Fairness Act of 2008 was implemented to help those persons who are in to financial trouble because of over expenditure in medical bills. This newly implemented law increased the Federal Homestead exemption by USD$250000. However, it will not be of good help to those who does not have enough home equity.
Treatment of Medical Bankruptcy under Chapter 7
Whenever a person is filing for Chapter 7 bankruptcy, the medical bills are discharged in most cases. But the same would be recorded in the credit report and the record will stay for ten years. Moreover, that reduces the chance of getting fresh credit.
Treatment of Medical Bankruptcy under Chapter 13
When Chapter 13 bankruptcy is filed then it is required to pay off the medical bills through a new repayment plan. Filing Chapter 13 bankruptcy will help the defaulter to retain any assets. The medical bills are minimized in most of the cases and the case would be recorded for more than 7 years in the credit report.
Reasons for rise in Medical
Mainly there are two reasons for the rise in medical bankruptcy. The most important reason is the increasing in medical expenses. In addition, the second reason is due to employers increase in medical expenses due to giving of health benefits to the employees.
Medical Bankruptcy Fairness Act (2008)
The Medical Bankruptcy Fairness Act of 2008 was implemented to help those persons who are in to financial trouble because of over expenditure in medical bills. This newly implemented law increased the Federal Homestead exemption by USD$250000. However, it will not be of good help to those who does not have enough home equity.
Treatment of Medical Bankruptcy under Chapter 7
Whenever a person is filing for Chapter 7 bankruptcy, the medical bills are discharged in most cases. But the same would be recorded in the credit report and the record will stay for ten years. Moreover, that reduces the chance of getting fresh credit.
Treatment of Medical Bankruptcy under Chapter 13
When Chapter 13 bankruptcy is filed then it is required to pay off the medical bills through a new repayment plan. Filing Chapter 13 bankruptcy will help the defaulter to retain any assets. The medical bills are minimized in most of the cases and the case would be recorded for more than 7 years in the credit report.
Reasons for rise in Medical
Mainly there are two reasons for the rise in medical bankruptcy. The most important reason is the increasing in medical expenses. In addition, the second reason is due to employers increase in medical expenses due to giving of health benefits to the employees.
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