Articles from St. Petersburg Bankruptcy Law Blog

Bankruptcy may be able to help you reduce or erase your medical debt. However, medical debts are handled differently in each type, or “chapter,” of bankruptcy in California. Therefore, it is important to understand how bankruptcy affects medical debt before you file your petition. In this article, the Roseville Chapter 7 lawyers of The Bankruptcy Group will explain some key differences between how medical debt is treated in Chapter 7, and what happens to medical debt when you file for Chapter 13.

According to court records, in 2016 more than 6,300 Chapter 7 bankruptcy cases were filed in the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The same year, just under 2,150 Chapter 13 cases were filed, bringing the total above 8,000 cases. Some of these bankruptcy petitions were filed by individuals, while others were filed jointly by married couples, similar to the way spouses may choose to file a joint income tax return. But what about couples who are not married?

Millions of people file for bankruptcy each year in the United States. California is no exception, with nearly 72,000 cases filed statewide in 2016 alone. Over 14,000 of those cases were filed in Sacramento, peaking during March when more than 1,400 cases were filed. These statistics make it clear that bankruptcy is common – but the better question is, why do so many people file bankruptcy? And even more importantly, should you be one of them?

The two most common types of bankruptcy in California are Chapter 7 bankruptcy, a fast process that involves liquidation of property, and Chapter 13 bankruptcy, a longer procedure where debtors make monthly payments to keep their property while reducing or eliminating various debts. Chapter 13 bankruptcy can have negative short-term effects on your credit score, but for many Californians, the long-term benefits outweigh the initial credit score drop.