Although medical debt is a common cause of bankruptcy, there is no such thing as a Medical Bankruptcy. Bankruptcy laws require a bankruptcy filer to list all debts owed at the time of filing. Regardless of whether you file a Chapter 7 or Chapter 13 bankruptcy case, all creditors must be listed and will receive notice of the bankruptcy filing. Medical bills will be discharged by the bankruptcy, along with credit card debt, utility bills, personal loans, and other unsecured debts.
If your previous case was a Chapter 7 and you received a discharge, you must wait eight years from the filing date to file another Chapter 7 or 4 years from the filing date to file a Chapter 13. If your previous case was a Chapter 13 and you received a discharge, you must wait 6 years from the filing date to file a Chapter 7 or 2 years from the filing date to file another Chapter 13.
Filing a bankruptcy will stop the garnishment, but it will not get back the money garnished prior to the filing of the case. If a lawsuit has been filed against you, talk with a bankruptcy attorney before the garnishment takes effect.
Owing taxes to the Internal Revenue Service (IRS) or the Kansas Department of Revenue can result in aggressive collection measures, including tax liens on your real estate and personal property; levy of wages, bank accounts, Social Security benefits, and retirement income; and offset of future tax refunds. Bankruptcy will put these collection measures on hold and may even discharge your obligation to pay the tax debt altogether.
Our bankruptcy attorneys understand that bankruptcy is an option of last resort. Before contacting a bankruptcy attorney for advice, many of our clients seek help from a debt settlement company. They expect that the company will negotiate favorable payments terms with their creditors or even get the debt balances reduced. While there are some reputable companies that offer debt settlement services, there are also many companies that charge a high fee and do little to help.