Can a NJ Bankruptcy Forgive Gender Reassignment Surgery Debts?

NJ Bankruptcy

Bankruptcy is one of the more maligned aspects of the law. Unfortunately, some people feel like bankruptcy means they are a financial failure. But the truth is that bankruptcy can be a true lifeline when all other options have been exhausted. People on the brink or already in financial ruin can be given a clean slate and a chance to start over.

One specific group of the population for whom mounting debt is a real problem are those undergoing gender reassignment surgery. In some cases in NJ, gender reassignment surgery can be covered by health insurance when deemed medically necessary. However, even if a patient’s plan does cover the surgery, the costs can still be overwhelming. The process can span over a few years, and includes ongoing treatment including hormone therapy. Many gender reassignments require multiple procedures and/or surgeries as well.

Many aspects of a person’s transformation are considered “cosmetic” by health insurance companies and are therefore not covered. Some of these include voice alteration, jaw reduction, chin implants, hair removal, lip reduction, pectoral implants, and more. The costs can quickly spiral out of control. Medical bills can easily cripple your finances and declaring bankruptcy may be the only viable solution.

 

What Chapter Is Right for You?

It’s important to have a lawyer on your side who can help you navigate the confusing differences in the various bankruptcy filings. Veitengruber Law can guide you through the process of determining which chapter will be right for you and your future financial health.

Individuals can file for New Jersey bankruptcy in one of two ways: Chapter 7 or Chapter 13. There are important differentiations between these two types of bankruptcy and it’s important to choose the right one for your unique situation. If the medical bills from gender reassignment surgery are your chief debt, you can find relief through debt discharge in both of these filings.

 

The First Step

Before any individual may file for either Chapter 7 or Chapter 13 bankruptcy, they must receive credit counseling from an approved non-profit counseling agency within 180 days.  Veitengruber Law can assist you in this process. We can help you choose an agency that qualifies, that will work with you on the fees if necessary, and that will be the most beneficial for your financial education. The main objectives to the credit counseling are to instruct you on how to remedy your current poor finances and how to achieve and maintain financial health.

It is entirely possible after credit counseling to discover that filing for bankruptcy isn’t actually necessary for your situation. You may be able to work out payment plan(s) or pay negotiated sums to pay off your medical debts. In addition to your medical debts, you can naturally include other non-medical debts within the same bankruptcy. Some creditors will be more willing to accept reduced balances if they are aware that you are beginning bankruptcy procedures. To them, a portion of repayment is better than discharged debt, which will mean they end up with no payment at all. If, however, you are unable to come to a solution after attempted negotiations, bankruptcy may in fact be the best course of action.

 

Chapter 7

If you don’t own property or many assets, this may be the course for you. In Chapter 7 cases, the debtor’s assets are given to a trustee who sells them off to pay your creditors. Certain personal property is considered exempt, however it is important to know the rules specific to your state. There is a list of federal property exemptions and NJ state exemptions. You can choose which list you are going to use, but you cannot use both. That is why consulting with a local bankruptcy attorney can be the difference in saving thousands of dollars of lost property. If you have no personal property to liquidate, it can still be possible for you to file for Chapter 7 with the help of an experience New Jersey bankruptcy attorney.

After your assets are liquidated and creditors paid based on priority, the remainder of your debts will be discharged – with certain exceptions – like student loan debt.

 

Chapter 13

Chapter 13 bankruptcy is that it gives the debtor a chance to reorganize. The petitioner must file a plan of repayment to creditors that will usually take place over a period of three to five years. After the repayment period ends, the debtor will receive a discharge of the remaining debts. The key difference between Chapter 7 and Chapter 13 bankruptcy is that in Chapter 13, the debtor remains in possession of their assets. If you own a home or other property, you will want to consider Chapter 13. This is another situation in which a knowledgeable bankruptcy attorney like George Veitengruber is invaluable, because he can guide you to the type of bankruptcy that will be most beneficial for your situation.

 

Post-petition Debts

From the date that you file your claim, any additional debts you incur will not be included in your bankruptcy case. This can be a major consideration in your decision to file if you are trying to clear debts from gender reassignment surgery. Medical bills can be extremely slow to process. Each doctor’s office must bill medical insurance, wait for the claim to process, receive the claim, and then bill the patient. It can be weeks or months from the date of a procedure to when you receive the bill. If you are accumulating debt from multiple procedures, you may want to wait until after you have been billed for all of your procedures and appointments before filing. When you file your bankruptcy claim you will be required to provide a detailed list of all the creditors and amounts due. Any debts that are incurred after the date your petition is filed, will not be discharged and you will be responsible for paying them back.

Undergoing a major transformation like gender reassignment is a life-changing experience. If you need to go through bankruptcy proceedings, don’t be intimidated.  George Veitengruber is an experienced attorney who can guide you through the process every step of the way: seeking credit counseling, negotiating credit balances, choosing the right chapter, maximizing your property exemptions, minimizing your post-petition debts, and making sure much of your debts are discharged, including medical debt from gender reassignment surgery.

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