Arizona Car Accidents & Bankruptcy
Filing Bankruptcy To Deal With Debts From a Traffic Collision
Our Mesa Injury Lawyers take a look at the pros and cons of filing for bankruptcy as a remedy for debts associated with an injury accident or traffic collision. The experienced attorneys at My Arizona Lawyers practice both Personal Injury and Bankruptcy. Thus, we are well-equipped to discuss the options available to you when facing debt.
Being in a car accident is expensive. Even with the best insurance, you could be left with medical costs, time missed from work, mechanic bills, and even judgments from other drivers involved in the accident. When life circumstances beyond our control cause debts to pile up, bankruptcy may be available to you as a means to address your debt situation. When you’re ready for your free debt evaluation, call or use our online form to schedule an appointment with one of our debt relief lawyers.
Medical Bills & Doctor Expenses
Oftentimes, medical bills after an accident can exceed what your health insurance and auto insurance will cover. Even the least severe injuries can rack up thousands of dollars in medical bills. If you were the accident victim, you may be able to receive compensation for these bills, and receive treatment through medical liens in the meantime. However, there are several situations where you will be left responsible for your own medical bills. If so, these will most likely be unsecured debts, which makes them dischargeable in bankruptcy.
In Chapter 7 bankruptcy, your medical bills will be discharged without repayment. This can present an issue if you see the same doctors regularly. They may choose to discontinue treating you should discharge their bills in bankruptcy. While you can’t pick and select which debts are discharged in Chapter 7, you can privately agree to repay your balance after bankruptcy to convince your doctor to see you again. Or, you may want to choose Chapter 13 bankruptcy instead. In Chapter 13, debts are reorganized into four categories and paid in that order. Medical bills are in the last category of debts, which may or not be paid off in full, depending on your disposable monthly income. You should discuss this issue with your Phoenix bankruptcy attorney if you are concerned about receiving treatment from specific doctors after bankruptcy.
The most common cause of bankruptcy filings in Arizona is medical debt. Filing bankruptcy on medical debt in Arizona is a very common practice in Phoenix, Maricopa County, and throughout Arizona. Our medical debt attorneys are very familiar with medical bankruptcies and declaring bankruptcy to get rid of medical debt.
Personal Debts & Credit Cards
Missing time from work due to your injuries from a car accident often means accruing additional debts besides your medical bills. You may need to take out personal loans and use credit cards to keep up with expenses due to your missed income. The good news is that these debts are, for the most part, dischargeable in bankruptcy. They will also be included in the fourth category of debts paid in Chapter 13, along with medical bills. However, once you secure your debt, for example, using a title loan, you will need to pay off the debt before you can sell or transfer the asset.
This doesn’t mean you should take this as an opportunity to run up your unsecured debts. Luxury purchases of more than $725 in the 90 days preceding your bankruptcy filing won’t be discharged. Neither will cash advances of $1,000 or more in the 75 days before your filing. You should also keep in mind that you will lose all of your credit cards in bankruptcy, and won’t be able to apply for new ones until your case has been discharged. In a Chapter 7 bankruptcy, this is about 4 to 6 months. In a Chapter 13 bankruptcy, this is 3 or 5 years.
Personal Injury Judgments & Bankruptcy
If you were at fault (or mostly at fault) for the accident in question, you could be left with a hefty judgment from any of the other drivers who were involved. Personal injury judgments can include several expenses, like medical bills, time off work, pain and suffering, and more. However, judgments from car accidents are usually dischargeable in bankruptcy. You can discharge the debt in Chapter 7, or reorganize it in Chapter 13, unless one of two exceptions applies. If the accident occurred due to you driving under the influence, any accompanying personal injury judgment will be nondischargeable in bankruptcy. The same goes for judgments from willful and malicious conduct that causes injury to others or their property. Even if your judgment can’t be discharged, using Chapter 13 to pay it off may help your financial situation. You should consult with a bankruptcy attorney before filing bankruptcy to discharge a personal injury judgment after a car accident.
Mechanic’s Liens After an Arizona Car Accident
Another common expense after a car accident is the mechanic. If your vehicle wasn’t totaled, it may need minor or extensive repairs. If you wait too long to pay your mechanic’s balance after working on your vehicle, your mechanic may pursue a mechanic’s lien. The amount of time your mechanic must wait before pursuing the lien, and when that date starts running, varies by state. Once this lien is perfected, you won’t be able to sell or transfer the vehicle, regardless of if you file bankruptcy (unless you pay off the lien in an Arizona Chapter 13 bankruptcy. If the lien has not yet been perfected, or properly recorded, it can still be discharged in bankruptcy. That’s why it’s vital to act as soon as possible if you know you will be struggling with debts after a car accident. Therefore, you should learn about and consider all of your options, such as surrendering your vehicle and financing a new vehicle after your case is filed.
Are the Rest Of Your Debts Dischargeable In Bankruptcy? Schedule Your Free Debt Evaluation
Do you owe taxes, student loans, domestic obligations, and other types of debts? There are several rules and exceptions that govern the dischargeability of every type of debt. Along with all the other requirements imposed by bankruptcy, this can become increasingly complicated to navigate on your own. The best way to ensure that all of your debts are discharged in your bankruptcy as quickly as possible is by filing with a reputable Arizona bankruptcy attorney. To review which of your debts are dischargeable in bankruptcy, as well as for an affordable quote for bankruptcy representation, contact our firm for your free debt evaluation today. We offer post-filing payment plans to qualified filers starting as low as ZERO DOLLARS DOWN. Get started towards your financial fresh start with your free debt evaluation today.