Can Medical Bills Be Included in a Bankruptcy?
Medical problems are stressful enough without facing a significant debt burden after the fact. But all too often this is what happens. Medical bills cause most bankruptcies and many people, some of whom still face health issues, find themselves saddled with hundreds of thousands of dollars in medical debt. But can medical bills be included in a bankruptcy?
For most people, the answer is “yes.”
Medical bankruptcies, or bankruptcy that occur due to medical debt, are common. For many, filing for bankruptcy is a way out from under crushing medical debt. And even if there was a time they would’ve never considered bankruptcy or they view bankruptcy as failing, it is their best option once they are faced with uncertain and expensive medical issues.
Fortunately, medical debt is dischargeable in both a Chapter 7 bankruptcy and Chapter 13 repayment plans. In either case, medical debt is discharged if it cannot be paid in full. This means you can move forward with whatever life has in store for you without the burden of your medical expenses hanging over your head. You’ll get a fresh financial start, which is a big relief even if you still have a lot of issues on your plate regarding your health.
Medical Debt Makes Health Problems Worse
The irony of dealing with medical debt is that you might be undoing a lot of the good that came from the services that cost you so much. You pay medical professionals to treat your immediate medical concerns, but the exorbitant cost of that care leaves you in debt.
Debt and the pressure it brings if you can’t keep up is extremely stressful. Out-of-control stress caused by your debt negatively affects your health and triggers additional problems. It’s a vicious cycle that drains you and impacts your quality of life.
You can learn more about the negative effects of debt stress here.
Filing for bankruptcy, even if it is not something you ever imagined doing, relieves you of all or part of your debt obligation and eliminates the stress you face regarding the cost of your medical care. You’ll not only enjoy financial benefits from filing, but you’ll also reduce your health risks.
How Do I Know If Bankruptcy Is the Best Option for Me?
If you’re wondering can medical bills be included in a bankruptcy, here’s some good news: They can and you’ll enjoy a variety of other benefits when you file, too. But this isn’t to say that filing for bankruptcy because of medical debt is for everyone.
How do you know if you are a good candidate? You should consider medical bankruptcy if:
- Medical debt isn’t your only debt, even if other debts were affordable before your medical issues arose
- You’ve tried working with medical creditors about reducing or eliminating your debts and it’s been unsuccessful
- It’s impossible to create a payment arrangement directly with the medical care provider – some are willing to take as little as $10 or $20 a month, but this isn’t always the case
- Your medical debts have been reported to a credit bureau or creditors are threatening to do so – something that sometimes happens less frequently with medical debt than other types of debts
- Medicaid or Medicare isn’t providing you coverage
There are no guarantees with medical debt and everyone’s situation is different. In some cases, medical debt is easier to manage than other types of debt, which means you have more options. But this isn’t always the case. The best thing to do is to speak to an attorney who can evaluate your situation. They will help you determine if bankruptcy is your best choice.