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Does filing bankruptcy discharge medical debts?

No one wants to consider the possibility of falling into debt. However, with medical costs as high as they are, it is possible that anyone with a health emergency could also enter into a financial emergency at the same time.

Bankruptcy often feels like a scary point of discussion. In reality, it could actually provide needed financial relief in difficult times.

Issues with medical debt

Forbes discusses what filing for bankruptcy can do for medical debt. Nearly 1 in 5 households could not pay for medical care when they needed it, in accordance with a 2021 study by the Census Bureau. The Consumer Financial Protection Bureau also stated that medical debt served as the number one reason for debt collectors to contact consumers in 2022.

Needless to say, medical costs – notorious for being cripplingly high – can put just about anyone in serious trouble if they end up running into an expensive health problem.

However, bankruptcy could take care of these issues. Depending on the type of medical debt and the type of bankruptcy, medical debts might end up forgiven.

Bankruptcy and medical bills

Generally speaking, most medical bills fall under the classification of “nonpriority unsecured debts”. In short, they are the type of debt that is most likely to get wiped clean if a person files for bankruptcy. This means the person who filed for bankruptcy does not have to repay said discharged debt.

This happens when filing via Chapter 7 bankruptcy, i.e. liquidation bankruptcy. With Chapter 13, on the other hand, it is possible to work together with the medical facility to work out a payment plan and preserve relationships with healthcare providers.


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