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Chapter 7 Bankruptcy and Medical Bills

Most of us are just one medical emergency or illness away from financial disaster.

For those struggling with the financial weight of a health crisis, Chapter 7 bankruptcy is designed to eliminate medical bills and wipe the slate clean.

Through Chapter 7, medical bills may be completely wiped out in only a few months.

If you're burdened by medical debt and wondering how Chapter 7 bankruptcy could help you, speak with a local Chapter 7 attorney today:

How Chapter 7 Works to Eliminate Medical Bills

Chapter 7 bankruptcy was created to help individuals struggling with certain types of debt, including medical bills, who simply don't have the income needed to pay back their creditors.

A primary type of unsecured debt that may be eliminated in Chapter 7 bankruptcy is medical debt. Specifically, hospital bills, surgery bills, and invoices for more routine care may be discharged through Chapter 7.

In addition to medical bills, other types of unsecured debt that may be reduced through Chapter 7 bankruptcy include:

  • Credit cards
  • Payday loans
  • Utility bills
  • Some personal loans

Another advantage of using Chapter 7 bankruptcy for medical bills is that the process generally goes relatively quickly, allowing you to restart your financial life shortly after filing for bankruptcy.

Chapter 7, however, is usually reserved for people with limited assets. In order to be eligible, you must first pass a Chapter 7 means test, which compares your income to the median in your state. Therefore, this test is different in every state, and often changes from year to year.

If you pass the means test, you will also be required to take a credit counseling class as part of the bankruptcy process.

Of course, the means test isn't a traditional test like the ones we all dreaded in school. It is simply a way to measure your income in relation to the average income in your state.

A local chapter 7 lawyer can help you determine whether you are eligible to file.

Ask a Chapter 7 Lawyer About Discharging Your Medical Debts

You probably still have questions about Chapter 7 bankruptcy and medical bills. When you contact a local bankruptcy lawyer, these questions may be helpful:

  • Will Chapter 7 clear all of my debts?
  • How long will the bankruptcy process take?
  • What happens after bankruptcy?
  • Is it a good fit for me?
  • What if I don't meet the Chapter 7 eligibility standards?

If you do not qualify for Chapter 7 bankruptcy, a better option may be to file for Chapter 13 bankruptcy. This type of bankruptcy is designed for people who want to clear debt related to their home mortgage or car loans. However, you may also include medical debt in this filling.

Through Chapter 13, you will be able to reorganize your medical bills into a consolidated plan, allowing for a more reasonable payment schedule.

Remember, your attorney works for you, so don't hesitate to ask about your options. To learn more about Chapter 7 bankruptcy, contact a local bankruptcy lawyer today when you complete the free form on this page.

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