Discharging medical debt through bankruptcy is a common concern for many individuals who are overwhelmed by healthcare expenses. While bankruptcy can eliminate several types of unsecured debt, such as credit card balances and personal loans, many clients specifically want to know whether their medical bills can also be included.
This short guide explains when and how the courts allow you to discharge medical debt through bankruptcy and what limitations may apply. Our attorneys are here to help you understand which debts are eligible, which may be exempt, and how to move forward toward financial relief with confidence.
Can I Discharge Medical Debt Through Chapter 7 Bankruptcy?
Medical bills are considered unsecured debt, which means they can often be fully discharged through a Chapter 7 bankruptcy. In most cases, people who file Chapter 7 are able to keep their property because their assets are protected by available exemptions, resulting in a no-asset case.
Eligibility for Chapter 7 is based in part on a means test, which helps determine whether this option is the right fit based on your income and financial circumstances. Our attorneys will review your situation carefully and explain how these rules apply to you.
Does Chapter 13 Bankruptcy Allow for Medical Debt Discharge?
The purpose of a Chapter 13 bankruptcy is to give you the opportunity to repay some of your debts within a three- to five-year period. The court must approve a plan to guide the reorganization process, and any remaining unpaid medical bills are discharged when your repayment plan expires, presuming you made the agreed-upon payments.
Chapter 13 is a sound financial option if you want to protect high-value assets. However, you must have a steady source of income and meet specific limits for both secured and unsecured debt to qualify.
Factors To Consider When Discharging Medical Debt Through Bankruptcy
If you plan to eliminate medical bills through bankruptcy, there are other factors you need to consider. First, you cannot file for bankruptcy for your hospital bills alone. You must include and name all eligible debt with your filing, but this rule is a good thing.
Once you file for bankruptcy, an automatic stay will prohibit all your creditors—even health care facilities and their agents—from continuing to collect on your outstanding balances. Working with an experienced bankruptcy attorney at Walker & Walker helps ensure the process is handled correctly and moves forward without unnecessary delays.
Get Advice About Eradicating Medical Debt From an Experienced Bankruptcy Attorney
Learn the truth about discharging medical debt through bankruptcy by reaching out to our experienced attorneys at Walker & Walker Law Offices. We have the straightforward answers you need to make clear and concise decisions.
Schedule a phone call with our Minnesota-based firm now to discuss your options. We can start your case over the phone today for zero down.