You may feel overwhelmed with debt. Especially, since you faced an unexpected knee surgery last year, which also required several sessions of physical therapy afterward. You may wonder if you should consider bankruptcy. But will it wipe out the thousands you owe in medical debt?

Chapter 7 and medical debt

First, you should know that Chapter 7 bankruptcy will wipe out your medical debt. In fact, 61% of all bankruptcies include discharging significant medical debt. However, a Chapter 7 bankruptcy doesn’t discharge only your medical debt. It can wipe out credit card debt and other debts. In some circumstances, people can discharge their student loans. You may be able to keep your home through Tennessee’s homestead exemption. Yet you have to meet certain income limits through a mean’s test to qualify for a Chapter 7 bankruptcy.

Chapter 13 and medical debt

Some people struggling with medical debt opt for a Chapter 13 bankruptcy. With a Chapter 13, you set up a payment plan over three to five years to pay back your debt. If you don’t want to risk damaging your relationships with your doctors because of unpaid debt, you may choose a Chapter 13. Then, your medical providers will know they will get payment. The other advantage of a Chapter 13 is that it only stays on your credit report for seven years.

You also may need to seek a Chapter 13 bankruptcy if you have enough income that you aren’t eligible for a Chapter 7.

Filing bankruptcy is complicated. You should consult an experienced attorney to review what bankruptcy options might work best for your situation. You want to take the right steps, so you can get out from the pressure of mounting medical debt and start fresh.