Did you know that over 40% of American adults have medical debt? While bankruptcy can provide relief, misinformation stops many people from taking necessary steps to regain control.

Let’s bust some of the most common myths surrounding medical debt and bankruptcy so you can understand the facts and make better decisions.

Myth 1: Bankruptcy Means You Lose Everything

Truth: Bankruptcy doesn’t mean you lose all your assets. Texas has some of the strongest exemptions in the country. For example:

  • Your home is protectedunder Texas’ homestead exemption, regardless of its value (as long as it meets size requirements).
  • You can keep your car, personal property, and retirement savings up to specific limits.

Chapter 7 bankruptcy may clear your medical debt while allowing you to keep essential assets. Chapter 13 lets you create a repayment plan without liquidating property.

Myth 2: Medical Debt Is Different from Other Debt

Truth: Many believe medical debt isn’t “real debt.” However, once unpaid medical bills go to collections, they are treated the same as credit card debt. Creditors can sue for unpaid amounts, garnish wages, or place liens on property if you don’t take action.

Bankruptcy treats medical debt as unsecured debt, which means it can be discharged in Chapter 7 bankruptcy. This gives people in Texas a fresh start without sacrificing their livelihood.

Myth 3: Bankruptcy Will Stop You From Buying a Home or Car

Truth: Filing for bankruptcy does lower your credit score temporarily. But most people can rebuild their credit faster than they expect. In fact, many Texans qualify for car loans within months after bankruptcy. Buying a home may take longer, but some mortgage programs allow you to qualify two years after a Chapter 7 discharge.

Banks understand that bankruptcy can happen to anyone, especially due to medical emergencies. What matters is how you rebuild your financial habits afterward.

An image of a person struggling to pay bills

Myth 4: Bankruptcy Is Only for Financially Irresponsible People

Truth: Bankruptcy is not a sign of failure. It is a legal tool to protect people who are drowning in debt. Most medical bankruptcies happen to responsible, hard-working families.

Medical emergencies, unexpected surgeries, or chronic illnesses often result in thousands of dollars in bills. Even insured Texans can struggle if they face high deductibles or out-of-network costs.

Get Legal Help From a Medical Debt Relief Attorney

Medical debt can happen to anyone. Texas laws offer strong protections for those seeking relief through bankruptcy. Don’t let myths stop you from getting the help you need. If you’re struggling with medical debt and bankruptcy, seek advice from the Law Office of Joel Gonzalez. We are a debt relief law firm in Texas, serving in Beeville, Victoria, and Alice.

Our debt relief attorney helps Texans find relief through practical, legal solutions like bankruptcy for medical debt relief. We can guide you step by step, ensuring you keep what matters most while achieving a fresh start. Contact us now to schedule a free consultation and take the first step toward financial peace of mind.Top of Form

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