Can I Include Medical Debt in a Bankruptcy?

If you’re like 2 million other Americans, you may struggle with medical debts, even if you have insurance.  Medical care costs are skyrocketing, insurance covers less than it ever did, and premiums are through the roof if you’re lucky enough to have it all.

Some people struggle to pay for routine doctor’s visits. If the issue is a major accident, a terminal disease or a lifelong chronic illness medical bills can bury any family very quickly, even a family with above-average earning power. If your illness keeps you from working you could be in even bigger trouble.

For some people, even a $500 medical bill is enough to send them into a financial tailspin. And while some medical bills can be settled, addressed by hospital charity departments or taken care of quickly, others will go to collection agencies who will want to hound you day and night for the balance.

Fortunately, medical bills can be included in bankruptcy. Here’s what you need to know.

You May Have a Few Options…But Not Many

Those who like to lecture and shame people who need to declare bankruptcy love to point out there are other options for medical bills.

And there are. Sometimes.

Some medical facilities will work out a payment plan. Some have in-house charity departments; if you’re in dire straits they may agree to wipe out the debt or settle it for pennies on the dollar. Some charitable organizations will help.

And some will tell you that your $49,000 income is way too high to receive help with your $250,000 medical bill, and will refer you to collections as if to punish you for daring to get cancer.

Explore the options if you can, but don’t be afraid to seek relief if you need it. The people who are offering criticisms will probably keep right on offering them until the day they are in the medical hot seat.

Doctors Will Keep Seeing You

Some of our clients are afraid they won’t be able to get medical care if they include medical debts in their bankruptcies.

Nothing could be further from the truth. The emergency room, urgent care, and the ambulance services can’t refuse service, legally, on the basis of your bankruptcy. Your family doctor might, but it rarely happens. And you can always find a new doctor, one who doesn’t know about your bankruptcy and who is willing to work with you.

Medical Bills are Unsecured Debts

Don’t rush to pay your medical bills with your credit cards. Medical bills are interest-free until you start charging them. They aren’t attached to assets, like houses or cars, which means you’re not going to have anything taken away from you if you don’t pay them, unless you get sued for them.

In a Chapter 7 they’ll be discharged entirely. In a Chapter 13 you’ll address a portion of these bills in your payment plan, and then they’ll be discharged.

Worried about your medical bills? Tired of getting dozens of calls from rude creditors about debts you simply cannot reasonably be asked to pay?

Contact us for your free consultation. We might just be what the doctor ordered.


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