Adam Law Group Blog

The Impact of Bankruptcy on Medical Debt

A large number of Americans end up in financial debt due to the high costs associated with medical care. Many Americans who are diagnosed with serious medical conditions as well as who are involved in serious accidents can end up facing hefty medical bills. Many of those people decide to utilize the bankruptcy process to alleviate financial strain and unmanageable debt. This is because if you declare bankruptcy, your medical bills will often be part of your discharged debt.

Chapter 7 Bankruptcy

Many people with a large number of medical debts have discovered that filing Chapter 7 bankruptcy is a wise idea. During this bankruptcy process, your medical debt will be discharged in addition to other types of unsecured debt. Not everyone can select Chapter 7 bankruptcy, however. You must qualify to file Chapter 7 bankruptcy by passing a means test. If it is determined that your income is too high, you will need to pursue Chapter 13 bankruptcy instead.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is an option if you have been barred from filing for Chapter 7 bankruptcy. Individuals who declare bankruptcy through Chapter 13 are required to reorganize all of their unsecured debt, but are still responsible for paying part of that debt. The amount that a person ends up paying in Chapter 13 bankruptcy may be a lower negotiated amount. After your Chapter 13 bankruptcy payment plan is complete, any medical debt as well as other types of unsecured debt will be discharged.

Losing Medical Providers After Declaring Bankruptcy

Many people are concerned about what will happen to their relationship with their medical provider if they decide to discharge medical debt through bankruptcy. Unfortunately, with the exception of treatment received in hospital emergency rooms, medical providers are able to refuse to treat you if their debt has been charged in bankruptcy. Many medical providers, however, will not take this action because they understand the reasons why people file for bankruptcy. As a result, most people who discharge medical debts through bankruptcy discover that providers are willing to keep them on as patients, provided that they pay any debt owed going forward.

Speak with a Seasoned Bankruptcy Lawyer

If you are interested in navigating the bankruptcy process to eliminate medical debt, a knowledgeable bankruptcy attorney can answer any questions that you might have about the process as well as make sure that you successfully bypass any obstacles that arise. At Adam Law Group, we understand just how challenging bankruptcy can be and will work to make sure you have the assistance necessary. Speak with us today to schedule an initial consultation during which time we will begin taking steps to help you with the bankruptcy process.