Bankruptcy and Medical Bills
By Rogena Jan Atkinson, Attorney at Law
Filing for bankruptcy due to overwhelming medical bills happens quite often. In fact, medical bills are one on the primary reasons that people file bankruptcy. If you or a loved one have ever been hospitalized or suffered from a long term illness, you probably are aware of the high costs of healthcare. If you don't have medical insurance or are underinsured, the financial burden can definitely challenge your finances. Medical bills after a temporary illness or bills due to chronic medical problems push many people to the edge of financial illness. Even in situations where people have the best medical insurance available, taking time off of work and loss of income can strain a person's finances. When you or a loved one have suffered from an illness, that has left you with medical bills, doctor bills, hospital charges, or any other type of medical related debt, you may consider dealing with those bills in bankruptcy. Depending on whether you file a Chapter 7 bankruptcy or Chapter 13 bankruptcy, medical bills can either eliminated or reduced to pennies on the dollar.
When the rising costs of healthcare are coupled with the high cost of medical insurance for employers who in turn pass the increases on to employees, it can make just affording health insurance a financial challenge. It can become very costly if you or a loved one become sick or suffer a long term illness. If the illness causes you to not be able to work, then this can compound your debt by incurring debt from medical expenses and doctor bills while having little or no income. As you might imagine, this can eventually take its financial toll. Bankruptcy can be a solution to burdensome medical bills.
Chapter 7 Bankruptcy & Medical Bills
When you have significant medical bills, filing a Chapter 7 Bankruptcy can eliminate your medical bills completely. If the bankruptcy means test says you qualify to file for Chapter 7, it will allow you to get rid of medical bills, hospital charges, doctor bills, medical collections, dental bills, as well as most any type of medical debt. Medical bills are considered unsecured debts, and are treated in bankruptcy just like credit cards. As such, medical bills can be totally eliminated in a Chapter 7 Bankruptcy.
Chapter 13 Bankruptcy & Medical Bills
In situations where the bankruptcy means test dictates that you aren't eligible to file for Chapter 7 Bankruptcy, you may instead choose to file for Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy is a court supervised repayment plan which can allow you to keep your most important property while repaying your debts over time. If you file for Chapter 13 Bankruptcy you may be able to significantly reduce your medical bills. Chapter 13 can allow you to repay your medical bills over a 3 to 5 year period of time based on your disposable income. Quite often, Chapter 13 Bankruptcy forces unsecured creditors like medical providers, hospitals, and doctor's to accept pennies on the dollar.
Just like an illness that can be cured, there may be a cure for overwhelming medical debt. Filing for Bankruptcy can often be a way to deal with burdensome medical bills. If you have medical bills, doctor bills, hospital bills, medical collections, or any other debt problems, don't wait until you lose everything before you get financial help. Bankruptcy can be an option for a fresh financial start and could be the cure for your debt problems. If you are considering your bankruptsy options to get rid of, or reduce your medical bills, contact a bankruptcy lawyer in your area to get the facts.
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