Bankruptcy is a financial safety net that can help you eliminate overwhelming debt and restructure your finances for a fresh start. However, it is not designed for multiple uses. In fact, Congress has passed laws discouraging “serial” filings. In some cases a debtor may not be eligible for a discharge in a second bankruptcy case, or may lose the protection of the automatic stay, or may not be eligible to file at all. As a result, it is important to take time before filing to get your finances in order to ensure that your bankruptcy case is successful the first time and is only a once in a lifetime event.
One way to control the risk of a repeat bankruptcy is to visit your family doctor for a check-up before filing. The obvious purpose of this visit is to ensure that you do not have a medical condition that will require expensive treatment or care. Increased medical expenses can be anything from a small monthly prescription cost to a serious illness requiring hospitalization. All of these expenses will impact your bankruptcy schedules and means test calculation.
According to a study published in early 2005, 46 percent of bankruptcies were related to outstanding medical bills. Medical bills incurred after your bankruptcy case is filed are generally not included in the bankruptcy and can quickly derail your case. If these bills arise after your discharge, you are not able to discharge them in another bankruptcy for two to eight years. If you have a hidden medical condition, it is best to discover it before you file a bankruptcy case. Your attorney can delay your bankruptcy filing and keep your creditors off your back while you receive medical treatment. After you assess the costs of the medical treatment, then you can discuss getting your finances in order using the federal bankruptcy laws.
Before filing a bankruptcy case, visit your family doctor for a check up. Bankruptcy is a time for restructuring your finances and a poor time for unexpected expenses.