Tag: unsecured debt

Medical Debt

How to Lower Your Medical Debt and Avoid Damaging Your Credit

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Like other types of debt, unpaid medical bills can stay on your credit report for up to seven years. It can affect your ability to take out loans, finance a home or car, and qualify for credit.

If you can resolve medical debt quickly or keep it below $500, it may never show up on your credit report. Paid medical debt, medical debts under $500, and unpaid debts less than one year old are no longer reported by the three major credit bureaus.

Here are some ways to get rid of medical debt.

  • Review your bill carefully. Request an itemized bill and check for errors. Make sure the charges are accurate, that you were not billed twice, and your insurance benefits were applied.
  • Request a payment plan. Hospitals and doctors’ offices often offer payment plans and may work with you to set an affordable monthly amount. These plans are often interest-free and can help keep your account out of
  • Negotiate the bill. Hospitals will sometimes allow you to negotiate a lower balance. This can apply when you either pay in full or within a certain period.
  • Explore financial assistance options. Some hospitals offer financial assistance programs that can significantly discount or entirely waive medical bills for qualifying patients. You may qualify for reduced or free care based on your household income, especially if you are uninsured or underinsured. These policies usually apply to medically necessary care, with eligibility determined on a sliding scale based on the Federal Poverty Level.

Here’s what to do if your medical debt is already in collections.

  • Confirm the debt is valid. You have the right to request a debt validation letter from the collection agency. Review it to confirm the amount is correct and that your insurance was If the agency cannot verify the debt, you can dispute it with the credit bureaus.
  • Check if the debt will be recorded. Medical debt under $500, or less than a year old, should not appear on your credit reports. If they do, you can file a dispute with the credit bureaus to have it removed.
  • Reduce the balance. Even if you cannot pay the full amount, lowering the debt below $500 may help remove it from your credit report. Once you pay it down, ask the collection agency to update your credit report.

How Bankruptcy Treats Medical Debt

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing. Making the decision to file for bankruptcy is never an easy one.

Fortunately, consumers have the option available to them to file for bankruptcy to escape this burden of medical debt. In a bankruptcy case, debts are classified into two categories: secured and unsecured, as well as priority and nonpriority debts. Secured debts are those that are backed by a form of collateral, while priority debts can be unsecured but receive special status, such as tax bills, student loans, and child support. Unsecured debts are those debts that are not secured by collateral and include personal loans, credit card debt, and medical debt.

In a bankruptcy case, unsecured debts are the ones that are discharged at the end of the case, while priority and secured debts are the focus of payment plans or payment in a Chapter 7 case after assets are liquidated. If a debt is discharged, this means the court has issued an order stating that the debt does not have to be paid.

Medical debt may also become part of the repayment plan issued as part of a Chapter 13 bankruptcy case. The bills may not end up paid in full, but the medical providers will receive at least some amount of payment, which helps the consumer maintain a relationship with their healthcare providers. Repayment plans normally last three to five years, ending with the consumer’s remaining debts, including medical debt, getting discharged.

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Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A., has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild, and recover. The day you hire our firm; we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken, P.A. website at www.miamibankruptcy.com.

Medical Debt

New Study Looks at Medical Debt Bankruptcy Among the Insured

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A new study by the University of Washington reveals working age Americans are more vulnerable to bankruptcy after an injury like a car crash or a fall that requires hospitalization.

Surprisingly, it’s not the lowest income patients or those without health insurance. It is the working class and working age families that are being hit the hardest by medical debt. The study also revealed people are more than three times more likely to delay medical care or treatment if they already have medical debt.

How Medical Debt is Handled in Bankruptcy

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing.  Making the decision to file for bankruptcy is never an easy one.

Fortunately, consumers have the option available to them to file for bankruptcy to escape this burden of medical debt. In a bankruptcy case, debts are classified into two categories: secured and unsecured, as well as priority and nonpriority debts. Secured debts are those that are backed by a form of collateral, while priority debts can be unsecured but receive special status, such as tax bills, student loans, and child support. Unsecured debts are those debts that are not secured by collateral and include personal loans, credit card debt, and medical debt.

In a bankruptcy case, unsecured debts are the ones that are discharged at the end of the case, while priority and secured debts are the focus of payment plans or payment in a Chapter 7 case after assets are liquidated. If a debt is discharged, this means the court has issued an order stating that the debt does not have to be paid.

Medical debt may also become part of the repayment plan issued as part of a Chapter 13 bankruptcy case. The bills may not end up paid in full, but the medical providers will receive at least some amount of payment, which helps the consumer maintain a relationship with their healthcare providers. Repayment plans normally last three to five years, ending with the consumer’s remaining debts, including medical debt, getting discharged.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A., has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild, and recover. The day you hire our firm; we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken, P.A. website at www.miamibankruptcy.com.

SOURCE: New UW study looks at medical debt, bankruptcy among insured

Consumer Bankruptcy, Debt Relief

Debt Relief vs. Bankruptcy in 2025

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Debt relief and bankruptcy can offer real financial help in a challenging economic environment- but there are a few things you should know about each option.

American households are struggling with debt like never before, as total credit card balances have soared past $1.21 trillion nationally. With credit card interest rates approaching record highs and the cost of living rising, many people have found themselves trapped in a cycle of making minimum payments.

Amid the financial pressure, people are exploring different options to regain control over their debt.

Debt relief programs, such as credit card settlement plans, are increasingly accessible, while bankruptcy remains an option for those facing overwhelming debt.

Each option has unique benefits, costs, and long-term implications.

Debt relief programs only address unsecured debt, like credit cards, personal loans, and medical bills. These type programs cannot help with secured debts, like a mortgage or car loan.

filing for bankruptcy

Bankruptcy, on the other hand, can wipe out certain unsecured debts entirely, and in some cases, provide options for addressing secured debt. Understanding exactly what you owe, and to whom is the first step in deciding which approach to choose.

Debt relief programs work best if you have a steady income that allows you to make monthly payments. If your earnings are inconsistent or barely cover your living expenses, these programs can prove challenging to sustain.

For those whose income will not support repayment, bankruptcy provides a better option. However, post-bankruptcy budgeting is essential to avoid falling back into debt.

Choosing between bankruptcy and debt relief is a personal decision influenced by your total debt, income, credit outlook, and long-term goals.

Debt relief can offer structured repayment and lower interest costs without the long-lasting credit hit of bankruptcy, but it requires discipline and consistent payments. Bankruptcy, however, can immediately wipe out your debt and provide you with a fresh financial start when debt becomes unmanageable.

As you weigh your options, it is important to review each one carefully, ideally with a financial counselor, certified debt specialist, or experienced bankruptcy attorney before deciding.

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If you have questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can assist you and address all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild, and recover. The day you hire our firm; we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Credit Card Debt

How is Credit Card Debt Handled in Bankruptcy?

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Credit card debt is treated as an unsecured debt in bankruptcy. Unsecured debt is debt that is not secured by any collateral. For example, a mortgage would be a secured debt guaranteed by your home; an auto loan would be a secured debt guaranteed by your car. Unsecured debts, like credit cards, medical bills, and personal loans can be easily discharged in bankruptcy.

Most consumer bankruptcy cases do not include any assets, and there is no property that can be liquidated to pay off creditors. Any funds from liquidated assets are paid to creditors based on priority. Credit card companies and other unsecured creditors are usually last on the list.

If you file Chapter 13 bankruptcy, your repayment plan will be approved if it repays most or all your creditors over a three-to-five-year period. But that doesn’t mean all creditors will be repaid, some not at all. Creditors are repaid according to priority in Chapter 13.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans. There are certain qualifications a consumer must meet regarding income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

SOURCE: Credit Card Debt Under Bankruptcy Law | Bankruptcy Law Center | Justia

Medical Debt

Can a Bankruptcy Case Be Filed Over Medical Bills?

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The cost of healthcare has become a growing problem for many. One that has pushed patients to the brink of financial crisis. According to the Centers for Medicare and Medicaid Services, spending on healthcare in the U.S. has reached a record $4.1 trillion. The good news is bankruptcy can be used as an effective tool to eliminate medical bills, giving the consumer a fresh financial start.

According to figures from the 2021 U.S. Census, approximately one in every five households, or roughly 19 percent of all households, were not able to pay for medical care when it was needed. Many of these bills go unpaid and result in collections actions against the consumer. In fact, according to the Consumer Financial Protection Bureau (CFPB), in 2022, whenever debt collectors contacted consumers, medical debt was the main reason for this communication.

Bankruptcy Law, Consumer Bankruptcy

When Should I File Bankruptcy?

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Chapter 7 bankruptcy is a powerful legal tool that allows those in financial crisis to cancel debts such as medical debt, credit card debt, and unsecured personal loans.

As soon as a Chapter 7 bankruptcy case is filed, the consumer receives immediate protection from his or her creditors. This protection comes from the automatic stay that is issued by the court upon filing. The automatic stay puts a pause on all collection actions, including collection phone calls, legal proceedings to collect on a debt, wage garnishments, evictions, and foreclosures. The automatic stay also gives consumers a chance to breathe and work with the court and bankruptcy trustee.  

Credit Card Debt

How Credit Card Debt Affects Your Health

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Credit card debt can cause a lot of damage, and not just to your credit score. Credit card debt can cause stress and wreak havoc on relationships. It can also lead to depression, anxiety, and other health problems. Once you are in debt, reaching your financial goals becomes much harder. Spending money paying debt leaves you with less money for retirement savings, purchasing a home, and achieving other financial milestones.

According to a recent study, carrying significant debt can lead to more than just a bad day. Researchers followed a group of baby boomers, starting when they were between the ages of 28 and 40 and then checking in with them again in their 50’s and older. The group was then separated into subgroups based on how much unsecured debt they had. According to the data, the more unsecured debt a person had, the higher level of physical pain he or she lived with when compared to individuals in the other groups.

Debt Relief

Growing Number of Personal Loans Could Mean Danger for U.S. Economy

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The rise in personal loan debt has financial experts worried. According to a recent study from Equifax, personal loans are up 10 percent from the previous year. In fact, all three major credit agencies report a double-digit increase in the use of personal loans over the past few months.

More often than before personal loans are being utilized by consumers looking to pay for unexpected or needed expenses. In fact, personal loan debt was reported as being the fastest growing category of consumer debt.

Bankruptcy Law, Credit Card Debt, Debt Relief, student loan debt

Good Debt vs. Bad Debt: Do You Know the Difference?

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When it comes to debt, not all debt is created equal. If the money being borrowed helps increase the borrower’s net worth or income, that debt is considered “good” debt, while bad debt only worsens a person’s financial situation.

Good Debt

Good debt is any obligation that would increase a person’s net worth or income. While it does involve a financial obligation to repay a debt, it can also be something positive or beneficial to the consumer.  Good debt also tends to come with a lower interest rate on the amount owed. Mortgages are one example of good debt because the person who takes out the loan ends up with an asset that will increase his or her net worth. Car loans are also considered good debt since they are attached to an asset, namely a car. Student loans are another type of debt that are considered good debt, especially when it comes to obtaining a desired degree and furthering job prospects and earning power for the borrower. These loans may not be attached directly to an asset, but they tend to have lower interest rates, especially if the loans are federal student loans.

Bankruptcy Law, Debt Relief

The Differences Between Secured Debt and Unsecured Debt

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When it comes to debt and how it is handled in a bankruptcy case, two main categories exist, namely secured and unsecured debt. Even if you are not at the point yet where you will be filing for bankruptcy, knowing the type of debt involved can make a big difference, especially when money is tight, and you are worried about which debt to pay first: the mortgage or the credit card bill.

The main difference between secured and unsecured debt is the fact that one debt is secured by collateral and the other is not. Secured debt is debt that is guaranteed by collateral, which is something of value that the lender can seize for payment in the event the borrower is no longer able to pay on the debt.

Mortgages and auto loans are classic examples of secured debt. If you default on your mortgage or your car loan, the bank can foreclose on your home or repossess your vehicle to satisfy the debt. In comparison, unsecured debt is debt that is issued to someone but is not guaranteed by collateral.  The most common types of unsecured debt include payday loans, credit card debt, student loans, and medical bills.

When you are not able to continue paying on your unsecured debt, the lender cannot collect your property to satisfy the debt. However, they can report your account as delinquent, which will hurt your credit score. They can also pursue a legal judgment against you for the debt, resulting in a possible wage garnishment.

For the most part, secured debt tends to carry a lower interest rate on the amount owed. The main reason for this difference is the lender has some type of guarantee that they will receive payment, even if you default later. The lender does not have that same guarantee with unsecured debt. It is for this reason that unsecured debt tends to carry a higher interest rate because the investment is seen as more risk for the lender.

When it comes to a bankruptcy case, secured debt is handled differently than unsecured debt. If you are filing a Chapter 7 bankruptcy case, unsecured debt normally ends up being discharged at the end of the case, while secured debt can stay with the asset. If you are struggling to pay unsecured debt, such as credit cards or medical bills, filing a Chapter 7 bankruptcy case may be a viable option for dealing with the debt. If you are struggling to pay for both secured and unsecured debt, a Chapter 13 bankruptcy case may be a good option to allow you to continue paying on your mortgage and stay in your home while discharging unsecured debt at the end of the payment period. An experienced bankruptcy attorney can evaluate your financial situation, after looking at the different types of debt you are carrying to determine which plan is best for you.

Click here to read more on this story.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.