COVID-19 Medical Expenses and Chapter 7 Bankruptcy

Even for those with excellent health insurance, mounting medical bills can put a serious strain on finances. During this time especially, with the threat of COVID-19, many U.S. citizens fear a serious medical bill might cause a loss of financial stability. In fact, a recent survey showed that about half of Americans felt a serious medical cost would force them to file for bankruptcy relief.

 

Because of the coronavirus pandemic, this belief has increased by around 5% since 2019. While the threat of poor health and financial downturn is a scary possibility to keep at the forefront of your day-to-day, it’s important to remember that if you do have to file a bankruptcy case, those medical debts and many others will be quickly resolved. With the guidance and support of a Behm Law Group, Ltd. attorney, you can file a successful case for Chapter 7 bankruptcy in Owatonna, MN and receive long-term, effective debt relief.

 

Chapter 7 bankruptcy is a liquidation bankruptcy process. Essentially, this means your non-exempt assets will be sold (liquidated) and that non-exempt value will be paid to your creditors. The liquidation/sale of non-exempt assets is the exception rather than the rule of how things usually transpire in a chapter 7 bankruptcy case, however. Typically, all that people lose in a chapter 7 bankruptcy case are their unwanted debts.  Because the bankruptcy system is in place to help debtors who cannot repay their debts reorganize and rehabilitate their financial affairs, you will have the opportunity to assert bankruptcy exemptions that protect your property from the liquidation process. This typically includes protecting your house with the homestead exemption and protecting your car with a vehicle exemption. This means filers aren’t left completely destitute while fairness to creditors is still taken into account.

 

There are three main types of debt broken down in a Chapter 7 bankruptcy case:

 

  1. Priority debt, including child support, alimony, some tax debts, and others, all of which will be generally excepted from discharge in any bankruptcy process.
  2. Secured debt, such as a mortgage or car loan, you’ll pay in full if you want to retain the property securing (serving as collateral for) the debt. If you don’t want to retain the property, you’ll have that debt fully discharged.
  3. Unsecured debt, including medical bills and credit card debt, is discharged in a Chapter 7 bankruptcy case. If you’re struggling from severe medical debt from a COVID-19 case or any other treatment cost, a Chapter 7 bankruptcy might be the most effective debt relief option for you.

 

If the majority of your debts are unsecured and you know you can protect your home or other important property with exemptions, Chapter 7 will likely be a very effective way of obtaining long-term financial reorganization and rehabilitation.

 

To learn more about Chapter 7 bankruptcy in Owatonna, MN or the surrounding area, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

COVID-19 Stimulus and Bankruptcy

As the future of potential stimulus bills is still undecided, households across the United States are keeping a close eye on their finances. For some, a stimulus check may mean the difference between making a rent payment or being evicted. Not only do proposed stimulus bills offer a second check, they also extend several aspects that protect debtors from backlash if they are unable to meet monthly payments. If you are one of those debtors who faces unstable finances for any reason, this may be the ideal time to take action for long-term debt relief. Filing for bankruptcy may be the best option for your circumstances. With the help of Behm Law Group Ltd., you can determine if filing for bankruptcy in Luverne, MN, and the surrounding area is right for you.

 

When the CARES (Coronavirus Aid, Relief, and Economic Security) Act was established in March 2020, $2.2 trillion was used for various support systems for individuals and businesses across the United States. Anyone who filed for bankruptcy after the CARES Act passed knows that the stimulus checks and other aspects of the bill were protected assets in their bankruptcy cases. They could not be seized by the trustees administering their bankruptcy cases.  If you are worried about losing that vital stimulus support after the next bill passes, fear not. Any income from COVID-19 stimulus will be exempt from liquidation in Chapter 7 bankruptcy or a repayment plan in Chapter 13 bankruptcy. Additionally, the boost in income from the stimulus won’t prevent you from qualifying for bankruptcy.

 

While we wait for the next stimulus bill to pass, we can compare the CARES Act to what might be coming. Nearly all of us experienced the benefits of the CARES Act, so if we look at the differences between the proposed HEROES (Health and Economic Recovery Omnibus Emergency

Solutions) and HEALS (Help End Abusive Living Situations) Acts, we can predict how each might affect us.

 

Total cost of each packages

  • CARES: $2.2 trillion
  • HEROES: $3 trillion
  • HEALS: $1 trillion

 

Stimulus check amounts

  • CARES: $1,200 for each individual earning under $75,000, $2,400 for joint earners making under $125,000 with a reduction of $5 from every $100 for earners making more than income maximums
  • HEROES: same as CARES
  • HEALS: same as CARES

 

Stimulus check additions for dependents

  • CARES: $500 per dependent 16 and younger, which eliminated college students from receiving either a stimulus check or dependent additions
  • HEROES: maximum of three additions of $1,200 per dependent
  • HEALS: $500 per dependent with no age limit

 

Unemployment benefit additions

  • CARES: additional $600 per unemployment check, plus the usual state benefits
  • HEROES: same as CARES
  • HEALS: starting additional $200 per unemployment check, which will increase to an additional $500 per unemployment check to match 70% of lost wages subtracted against the state unemployment check

 

Many parts of the CARES Act expired at the end of July, but eviction moratoriums and other protections are still in place for those unable to meet rent and debt payments. Because of these protections, it is still viable to file for bankruptcy during this time. To get started on your bankruptcy in Luverne, MN, today, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.