Bankruptcy vs. payment plans for overwhelming medical bills

The best financial option for everyone is avoiding overwhelming debt or taking on an amount that fits their budget. However, most people have no control over numerous unexpected costs, such as medical emergencies.

When debt becomes unmanageable, and people can no longer afford to make mortgage, rent or credit card payments, many are unsure of the best route to get their financial house in order. Should they file for bankruptcy or work with a debt settlement company?


Increased government regulation and enforcement have addressed many predatory practices by debt settlement companies. However, here are three of the biggest problems:

  • Lengthy process: Negotiations with debt settlement companies can take three to four years while customers risk lawsuits over debts they’ve accrued. Chapter 7 bankruptcy typically takes only a few months.
  • Expense: Debts can be settled for as much as 50% of the current amount owed but can actually be higher than the initial balance when adding late fees and interest. Both Chapter 7 and Chapter 13 bankruptcy typically resolve debts for pennies on the dollar without penalties or interest.
  • Credit scores: Both bankruptcy and debt settlement affect credit scores. However, those filing for bankruptcy usually see their scores rise within a few months, while it can take years to make progress under debt settlement.


Settlement companies often try to confuse people by spreading false information about bankruptcy and how people will lose their possessions. The truth is those who qualify for bankruptcy keep nearly all their belongings, even under Chapter 7.

Debt settlement companies prioritize their own best interests. Experienced bankruptcy attorneys, on the other hand, are morally and legally required to put their clients’ interests first. Your lawyer is dedicated to finding the best and most affordable way for putting your finances back on track.

Can Chapter 11 bankruptcy save your Indiana business?

As an Indiana business owner, you’re undoubtedly no stranger to facing problems head-on and rising above a challenge. Whether you’ve been in business less than 10 years or for several decades, the time and effort it took to build a successful company inspires you to persevere when problems arise, especially if those problems are financially related.

Any number of issues can spark a financial crisis in your business. The good news is that most money problems are temporary. However, some situations are definitely more serious than others. Not making a projected sales quota one month is concerning but not as worrisome as falling behind in your mortgage for several months in a row. If you’re facing a serious financial crisis, it’s a good idea to explore debt relief benefits, such as Chapter 11 bankruptcy.


Filing for bankruptcy as a means of debt relief can be a valuable financial tool to help overcome an existing financial problem and to lay the groundwork for a stronger financial future by wiping the slate clean and starting afresh. There are numerous types of bankruptcy, and each type carries its own eligibility requirements. The following list includes basic facts about Chapter 11, often used by business owners to avoid having to shut down during a financial crisis:

  • It’s known as a “reorganization” bankruptcy.
  • As a business owner, you may propose a plan to your creditors for approval.
  • You may also opt to have lenders propose the plan.
  • Terms of the plan are subject to your fulfillment of its obligations.
  • Your business may continue to operate as you navigate Chapter 11 proceedings, provided your case doesn’t involve fraud or gross incompetence.
  • It differs from Chapter 7, which typically requires complete liquidation of assets.

Being able to remain in control of operations for your business under a Chapter 11 bankruptcy plan means that you can continue to generate cash flow, which would provide additional funds to help you pay off your debts.


As an Indiana business owner, you understand that no two businesses, and, therefore, no two financial situations are exactly the same. The fact that there are numerous types of bankruptcy means that you can choose the most viable option to fit your specific needs and long-term business goals.

Chapter 11 bankruptcy is more complex than Chapter 7 or Chapter 13. Most business owners considering filing for Chapter 11 do so under the consultation of experienced financial advisers and others who are well-versed on U.S. bankruptcy codes and laws, in order to determine a best course of action in a specific set of circumstances.

Debt issues may have you thinking about bankruptcy

You’ve no doubt encountered financial challenges at some point in life. If you’ve gone through various life changes, such as getting married, having children, switching jobs or relocating to a new Indiana residence, your circumstances may have sparked financial distress in one way or another. Perhaps you’ve always been fortunate that you’ve been able to bounce back and get things back on track before they got too out of hand.

There are certain issues that often cause serious financial crises. Overcoming obstacles caused by one or more of these issues may not be so easy; in fact, it may be impossible, thus leading you to search for debt relief options such as bankruptcy. Many people use Chapter 7 or Chapter 13 bankruptcy to resolve financial problems and help restore stability.


Maybe budgeting isn’t one of your strongest skills. If so, you’re definitely not alone in your struggle. Mismanagement of a budget is one of the most common causes of debt throughout the country. In addition to making poor financial decisions, the following list shows other issues that often lead to full-blown financial crises:

  • Divorce, especially after having sacrificed a career to stay home full-time
  • Low-income employment
  • Loss of employment
  • Medical bills
  • Lack of savings
  • Gambling addiction or substance abuse
  • Spending future money

Perhaps you get a new job and base expenditures on what you expect to earn in a given amount of time. If you wind up not earning as much income or needing it for something else, you could wind up with a massive credit card balance that you do not have the means to pay.

Getting a divorce can cause serious financial challenges, especially if you’ve been out of the workforce for a long time. If you or someone in your household has a chronic medical condition or suffered a medical emergency, the bills might start rolling in faster than you can pay them. All of these issues rank high on most lists regarding common causes of financial crisis in Indiana and throughout the country.


You may have heard some negative things about bankruptcy, which causes you to hesitate when it comes it considering it as a debt relief option. Then again, perhaps you know someone who was able to pay off their mortgage, save their home and build their credit back up after filing for bankruptcy.

If you’re considering filing for bankruptcy, it’s best to research state laws ahead of time. Since there are numerous types of bankruptcy, it’s critical that you understand the basics of each so that you can determine a best course of action to fit your needs and help you achieve your ultimate financial goals.