Can Bankruptcy Help with Medical Debt?

Medical Bills and Bankruptcy

The rising cost of health care and the growing number of Americans without adequate health insurance coverage has led many people to file Chapter 7 bankruptcy to eliminate their medical debts. Medical debt is treated as a nonpriority unsecured debt in your Chapter 7 bankruptcy.  This means that your medical debts will not receive priority if the trustee is able to make any payments to your creditors. Even if a portion of your medical debt is paid through your bankruptcy, the remainder will be wiped out when you receive your discharge.  So if you are struggling with large amounts of medical debt, a Chapter 7 bankruptcy may be your easiest and best option to relieve this burden.

Are There Limitations on Discharging Medical Debt in Chapter 7?

There is no limit or cap on how much medical debt you can discharge in a Chapter 7 bankruptcy.

However, you must still qualify for a Chapter 7 bankruptcy. In order to qualify for a Chapter 7, your income must be low enough to pass a disposable income means test.  Further, even if you pass the means test, filing a Chapter 7 may not be in your best interest if you have a significant amount of assets you can’t exempt.

At Bennett Parker Law, we offer free one-hour initial consultations to individuals who are consumed by overwhelming medical debt. During our consultations, our attorneys are able to review an individual’s income and assets to determine is a Chapter 7 is in their best interest. If you would like to know more, call (602) 343-6250 to schedule your appointment today.

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