Medical Bill Debt Relief

Rising healthcare costs coupled with widespread unemployment have left many Americans looking high and wide for medical bill debt relief. Here's some basic information about how personal bankruptcy many be able to help those struggling to pay their medical bills.

Bankruptcy & Medical Bill Debt Relief

Personal bankruptcy may be an option for some people who are unable to eliminate their medical debts in any other way. But there is no one-size-fits-all bankruptcy. Different cases work in different ways.

• Chapter 7 bankruptcy: This type of personal bankruptcy works by offering filers a full discharge of their eligible unsecured debts. Medical debt is unsecured (that is, it is not connected to any property) and eligible for discharge in bankruptcy. However, Chapter 7 bankruptcy is not available to all people; in order to qualify, filers must qualify under the bankruptcy means test in order to demonstrate their need for Chapter 7's sweeping protections.
• Chapter 13 bankruptcy: This type of personal bankruptcy works by letting filers catch up on past-due debts over a period of three to five years. This type of bankruptcy works well for those who have a steady income and are able to make regular monthly payments. In some cases, Chapter 13 filers may have leftover unsecured debts discharged at the end of their repayment plan.

How Does Bankruptcy Relieve Medical Bill Debts?

Bankruptcy protection works to relieve debts from medical bills in two ways.

• The automatic stay: This legal protection takes effect as soon as a petitioner files a case with the bankruptcy court. It works by preventing collection actions of all kinds (including calls and mailings from creditors, repossession, foreclosure and debt lawsuits). The automatic stay typically remains in effect for the duration of the bankruptcy case (three to five years in Chapter 13, typically about four to six months in Chapter 7).
• The debt discharge: The bankruptcy court has the power to discharge (that is, eliminate) certain debts for bankruptcy filers. At the end of a bankruptcy case, the court can discharge a filer's eligible unsecured debts. Medical debts are generally eligible for discharge. Once a debt is discharged in bankruptcy, a filer is no longer responsible for paying it.

Learn More about Medical Bill Debt Relief & Bankruptcy

If you're ready to learn more about whether bankruptcy might be able to offer you relief from your medical debts, please fill out this form for a free consultation with a bankruptcy lawyer.