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How bankruptcy can eliminate medical debt

Suffering a serious injury or dealing with severe illness is devastating on its own. The high medical bills you receive as a result of diagnosis and treatment only exacerbate the stress. You may not have any idea about how to afford these skyrocketing medical costs, especially if you are experiencing lost income or reduced credit availability.

Filing bankruptcy is one viable method for getting out from under medical debt. Declaring bankruptcy may be the best thing you can do to get relief from unmanageable medical debt. Learning about your different options under bankruptcy law will help you make the right decision.

Chapter 7 bankruptcy for medical bills

When you file bankruptcy under Chapter 7, you eliminate your responsibility for repaying the medical debt. This provides you with immediate relief of any medical debt, including health care expenses charged to your credit cards. This form of bankruptcy can also relieve you from other types of debt collection from most creditors. It can even halt foreclosure and eviction. Chapter 7 is designed to help people who do not have a consistent and livable income. 

Chapter 13 bankruptcy for medical bills

Sometimes, an illness or injury does not impact your ability to earn a regular income. If you have a consistent income but are still having trouble repaying your medical bills, Chapter 13 bankruptcy may be the right option. Instead of discharging your debt, Chapter 13 sets up a payment plan so you can pay off your debt within three to five years. When you file Chapter 13, the bankruptcy court sets up an affordable monthly payment plan. The important thing to remember is that you must use any disposable income for repaying these debts until the period is over.  

Whether you pursue Chapter 7 or Chapter 13 bankruptcy depends on your financial situation, debts and whether you want to safeguard your assets. Either way, it is possible for you to resolve medical bills through bankruptcy.

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