Medical Debt In Bankruptcy

For many Americans, finances are tight and the unknown of the coming months is frightening. Many families are facing not only financial hardship, but are also at risk of eviction and bankruptcy from high medical expenses and limited income. Fortunately, there are some options to eliminate medical debt.

Bankruptcy Options

In a Chapter 7 bankruptcy, you can get rid of your hospital bills but it might require surrendering your property to the trustee. If you have no property or it’s not worth much, then your creditors wont be paid but instead they will be discharged. If you have a great deal of medical debt, surrendering your property might not be a realistic option. If you have significant medical debt, it may be worthwhile to consider a Chapter 13 bankruptcy. Under a Chapter 13 bankruptcy, you can use a portion of your future income to pay toward your debts. This allows you to keep your property and eventually have the upaid portion of your medical debt discharged.

What if I’m behind on my payments?

If you have missed payments on your medical debt, then you will need to make arrangements to address the missed payments. If you have missed payments, it is a good idea to contact your health care provider and explain the situation. Your health care provider may have an alternative payment plan or may be willing to accept a smaller payment. Some health care providers will agree to accept payments on your debt if you are in a Chapter 13 bankruptcy. This is because a Chapter 13 bankruptcy can restructure your debt and allow you to pay the debt back in installments. If you are negotiating a settlement on your medical debt, you may be able to get a better deal by negotiating a settlement instead of filing bankruptcy.

What if I still have a balance after bankruptcy?

If your medical debt is discharged in bankruptcy, then your debt will no longer be legally enforceable. However, if you acquired more medical debt after you filed bankruptcy then you may still owe money to your health care providers. It is important to understand that the discharge in bankruptcy will not automatically erase the debt the you incurred after filing, only from before filing. If you have not paid the debt by the time your bankruptcy case is closed, then you may be responsible for paying it yourself. It is important to remember that the mere fact that a debt is discharged in bankruptcy means that you should ensure that each creditor is respecting your discharge and not continuing to bill you. If you have a debt that is discharged in bankruptcy, you are not required to pay it.

For more information about how bankruptcy can eliminate medical debt or other forms of debt causing financial hardship, contact our Roseville bankruptcy attorney office today.