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Ways to Plan for Medical Emergencies After Filing for Bankruptcy

Ways to Plan For Medical Emergencies After Bankruptcy

Medical emergencies can create large, unexpected debts.  Sometimes medical debts can even cause bankruptcy.  It is important to plan for medical emergencies after filing for bankruptcy.   Unexpected medical bills can be controllable by the following planning tips.

Planning Tip #1: Acquire Medical Insurance

Medical insurance is the most powerful way to plan for unexpected medical costs. Although traditional medical insurance can be difficult to afford, nothing compares to it’s ability to protect you from unexpected medical costs.  Medical insurance may be possible with employer and local programs and should be pursued if at all possible.

Planning Tip #2: Medical Costs Sharing Plans and Other Forms of Protection

Medical cost sharing programs are becoming more widespread throughout the United States as a response to increasing insurance costs.  These programs require monthly contributions and operate in function very similar to medical insurance.   The cost savings can be enormous.

Also, there are many medical discount plans for medical and prescription costs.   Whatever program you enter, make sure to investigate the past reliability of the program.  Personal referrals and research may be required to determine if the program is sufficient for your needs and worthwhile.   Some programs may prove to be a cost-effective alternative to traditional insurance in some cases.   

Planning Tip #3: Medical Savings Account

If you have a medical insurance or similar program that requires a annual deductible, you may be qualified to use a medical savings account.   These special medical savings accounts offer two benefits.  First, automatic contributions to the account provide an easy system to save for unexpected medical costs.  Secondly, the taxing authorities will require income tax to be paid on amounts contributed to the account.  Talk to your employer or a tax professional to see if you qualify for a medical savings account.

The Best Tip Is Simple: Always Plan for Unexpected Medical Bills

Life is unexpected.  Large medical bills can come on within a very short period of time.  They can damage your financial life quickly if you do not have a plan.  Instead of “hoping for the best,” responsible financial planning always requires making a plan for medical bills.  The best tip is simply to take medical cost seriously.  If you have a plan, then it will be much more difficult for a series of medical bills to destroy your financial life.  Having a plan for medical bills can also  be an important step for avoiding the future possibility of bankruptcy.

Tips to Stop Collection Calls

Need to Stop Collection Calls?

Collection calls can be horrible.  Although some collectors are polite and understanding, many debt collectors are aggressive and demanding.  Debt collection calls can certainly add stress to an already stressful debt situation.  Here are a few tips for stopping collection calls.

Tell Collectors to Only Communicate with You Through Your Attorney

Talk to a bankruptcy or debt relief attorney.  Afterwards, you may want to demand all future collection calls to only go through your attorney’s office. This will give you time to either settle your debts or file for bankruptcy.  If you cannot settle the debt or file for bankruptcy within six months, then your creditors may continue to contact you.

Your creditor will only call your bankruptcy attorney usually once or twice to verify representation.  The same creditor may call you 20 or 30 times to keep pressuring you to make payments on the debt.   Follow the instructions of your attorney on how to deal with collection calls.  You cannot trust the information being given you over the phone by debt collectors.

Tell Collectors that They No Longer Authorized to Call You at Work

Under the Fair Debt Collection Practices Act, you may be able to prevent certain creditors from contacting you at work. If you receive a collection call at work, you need to tell the creditor that they are no longer authorized to contact you at work and they need to only contact you at home or directly via cell phone.  Although this does not apply to collection attempts being made by the original creditor, generally all collection agencies will be bound by this request and will cease attempting to contact you at your workplace.

File For Bankruptcy – All Collection Calls Will Stop

The most powerful method of stopping collection calls is to file for bankruptcy.   When you file for bankruptcy, an invisible shield call the “automatic stay” protects you from any further communication with your creditors.  This “automatic stay” will almost instantly stop a collection calls.

Sometimes creditors mistakenly call you after you file for bankruptcy.  If you receive such as call, you need to give the creditor your bankruptcy case number information and demand that they do not contact you in the future.  If they call again, instruct them to contact your bankruptcy attorney.  Make sure to document the inappropriate contact.  If the same creditor continues to contact you, give all the contact information to your bankruptcy attorney.   Your bankruptcy attorney will contact the creditor to make them stop.  Sometimes your bankruptcy attorney may even sue the creditor in bankruptcy court if the contact was sufficiently inappropriate and grievous.

Can One Spouse File for Bankruptcy?

Image illustrating bankruptcy exemptions

Sometimes a married couple may not be equally burdened with debts.  Most or all of the marital debts may only be in one spouse’s name in some situations.  Although married couples usually file together in bankruptcy, sometimes it can be advantageous for only one spouse to file for bankruptcy.

How Much Debt Can Decide Who Files 

If one spouse has much less debt, then you may want to consider whether that spouse needs to file for bankruptcy.  If it is possible to get the other spouse out of debt within 1 to 2 years, then it be advantageous for that spouse to stay out of the bankruptcy.  However, bankruptcy is the perfect time to deal with debts in their entirety.  It does not cost additional amounts usually if you add both spouses onto a single bankruptcy. Careful consideration with a bankruptcy attorney should always take place if a debt-laden spouse desires to not file bankruptcy.

Medical Debts May Require Special Consideration in Indiana

Medical debts can sometimes be collectible against both spouses in Indiana.  Even if only one spouse is listed on the debt, medical bills are sometimes collectible against the other spouse. If only one spouse files for bankruptcy, it is possible that medical creditors could attend collection on the other spouse even after the bankruptcy.  

The medical debts are required to have occurred during the marriage in order to potentially collect against the spouse.  If the medical debts were incurred before the marriage, then it is highly unlikely in Indiana that the current spouse will be found liable for collection.  Also, collection against spouses may not always occur with every medical debt.   Many times the medical debts are simply written off after the notice of the bankruptcy without any further attempt to collect against a potentially liable spouse.

Ultimately Seek Your Bankruptcy Attorney’s Advice

Your attorney will likely know better than anybody else whether both spouses should file for bankruptcy.  Your attorney will likely be familiar with the difficulties of repaying debt.  Upon request, your attorney can review the advantages and disadvantage of having only one spouse file for bankruptcy.

Bankruptcy and Donating to Charity

Bankruptcy and donating to charity are not entirely incompatible with each other. Donating to charity is a respected and considered desirable by the government.  Therefore, donating to charity is allowed to a certain extent within the framework of bankruptcy.  However, there are some limitations.

Regular charitable donations

Charitable donations that have occurred regularly in the past are generally allowed to continue during the Chapter 7 or Chapter 13 bankruptcy process.  As long as these regular, ongoing donations are reasonable in amount, the bankruptcy court will usually have no problem with them.   The court generally does not want to see ongoing charitable donations that exceed 15% of the bankruptcy filer’s income.   Therefore, if you have regularly given to a church or other charitable organization in the past, you may be able to continue to do so during the bankruptcy process.   Still, it is vital to seek legal advice with a bankruptcy attorney in such matters.

Out-Of-Ordinary or Large Donations

Any large or out-of-ordinary donation to charity before or during bankruptcy will be placed under heavy scrutiny in the bankruptcy court.  Generally, any large gift given away before or during the bankruptcy process will be heavily scrutinized by the trustee in bankruptcy court.  This is because the court may interpret your large gift as an attempt to deny proper payment to your creditors.  

Even a gift to charity can be considered a fraudulent transaction if the circumstances appear that you are attempting to defraud your creditors by simply giving the money away.  Although the bankruptcy court esteems donation to charity in high regard, the court will come down harshly on any attempt to dispose of assets that could have otherwise been used to repay debts.  The court considers such improper donations.  The court may consider actions against you such demanding the repayment of the money or denying your discharge in the bankruptcy case.

Talk to a Bankruptcy Attorney About Donating To Charity 

If you want to make charitable donations and are considering bankruptcy, you need to speak to a bankruptcy attorney as soon as possible.  Seeking general information about donations and bankruptcy is limited.  If you are considering filing for bankruptcy, you need to set up a consultation with a bankruptcy attorney.

Can you file for bankruptcy if you donate money to charity?