Many filers for personal bankruptcy who also receive assistance through Medicaid are concerned about the effect of bankruptcy on their medical treatment and benefits. These concerns arise from tales of bankruptcy resulting in creditors taking wages, bank accounts or other assets.
Fortunately, though, Medicaid is usually considered an exempt asset during bankruptcy, and creditors cannot touch this important source of health care funding for millions of Americans.
But bankruptcy laws are different in each state. To be sure your Medicaid benefits are fully protected during your filing, speak with a local bankruptcy attorney. For a free case evaluation with a bankruptcy lawyer near you simply complete the form on this page and we'll connect you right away.
When you file for bankruptcy, the court may allow creditors to take some of your non-exempt assets in order to eliminate some or all of your unsecured debts.
Bankruptcy law, however, protects certain exempt assets from creditors during the bankruptcy process. This allows a filer to continue meeting their daily living needs while attempting to restart their financial lives. In fact, such property sales are fairly rare in the bankruptcy world.
The exempt status of assets during bankruptcy is subject to the laws in your state. As a result, it is best to research your state's bankruptcy laws before filing.
Nevertheless, some types of assets are typically protected during bankruptcy. These include:
Your state likely allows many more exemptions from the bankruptcy process but, again, it is best to research your state's laws before coming to a conclusion about what will be protected during your bankruptcy.
Remember that the bankruptcy process is designed to allow consumers to pull themselves out of debt while protecting them from aggressive creditors. If you speak with a bankruptcy attorney over the phone or in person, make sure to tell them about your use of Medicaid so your lawyer may work to protect it.
Chapter 7 bankruptcy is designed for people with relatively limited incomes who are looking to eliminate their unsecured debts and restart their financial lives. It is generally the fastest type of bankruptcy, and doesn't require you to make regular payments or a lump sum payment to clear your debt. If you're on Medicaid, this may be your most reasonable bankruptcy option.
Chapter 7 may clear credit card debt, but it may also eliminate medical bills. As a result, bankruptcy may allow you to discharge some or all of your unpaid medical bills if you are unable pay them.
Other benefits of bankruptcy include:
Again, Medicaid payments are generally exempt during the bankruptcy process, but you should do your research before filing.
To learn more about your state's bankruptcy laws, and the relationship between Medicaid and bankruptcy, call a local bankruptcy lawyer today.