How Do I Declare Bankruptcy?
I did it about four years ago in California after bearing loads of punishing ex-wife-incurred debt for eight years. I do agree about the lawyer — they do the forms, and make sure you’re aboveboard in the eyes of the law. They also advise you as to whether or not, or how much, you can write off. There was just a change in federal bankruptcy law — not sure when it goes into effect — so legal advice might be especially good right now. The huge amounts involved in mergency medical bills being a current cause of much bankruptcy was one of the complaints Democrats had about the legislation, but it passed anyway. My lawyer, after reviewing my stuff, told me, “Everyone deserves a second chance.” That helped. They can also appear in court with you. I did have to answer questions from the judge, in my case, in front of a room packed full of probably 40 strangers, a bit like the initial day of jury duty only you’re having to tell the judge why the law should allow you to default on your debts.
Do *not* make bankruptcy your first option. Most clinics want you to pay more than they want you to go broke. Bankruptcy is like being in financial prison for 7 years, and $17k, though it seems like it, is not an insurmountable amount of money. I’d work harder on negotiating your bill and working out a payment plan.
Please check with a lawyer, keep Oct. 1 in mind (re: newer, tighter regulations), and truly make sure that there’s no other option (i.e. don’t just assume since you can’t see a way to pay it right now that there’s nothing else you can do — do some legwork to see definitively if any other options apply). Bankruptcy over $17,000 just seems a little extreme to me (though I understand how overwhelming that amount of debt must feel like), considering how long it can take to build your credit back. Try to negotiate with the hospital/clinic first (do not just ignore the bills — unpleasant as it may be, call back and at least indicate your willingness to work out something to try to keep things from going into collection in the meantime, and some hospitals even have people who’s job it is to work with the uninsured in cases just like this), and/or investigate (legitimate) credit counselors in your area who might be able to do so on your behalf. Case in point: When a friend of mine broke his
Also you asked about the process. In a nutshell it is like this: 1. You file bankruptcy with the district court. Your credit scores plunge pretty quickly after this. 2. A couple of months after filing you will attend a scheduled public meeting with the trustee (341 or Meeting of Creditors), which is basically where you answer some questions under oath. In a few cases a creditor may attend and cause trouble for you (which is where it’s good to have your attorney). If the trustee is ok with it and your papers are in order, you’re generally home free, since the court tends to act on their recommendation. In some states you may have to attend a financial management class. 3. A few months later your district court confirms the bankruptcy, which you likely won’t attend. The only snag at this point is if the trustee uncovers abuse, you haven’t responded to their requests for any supporting documentation, or the judge has some other similar reason. Otherwise this event either discharges the ba
