If you experience serious financial issues, your medical debts may qualify for discharge through bankruptcy. The court, however, does not help you reduce or eliminate just one type of debt, such as outstanding bills owed to a hospital.
Before filing a petition, you may wish to consider how bankruptcy could affect relationships with all of your health care providers. As reported by Credit Karma, some physician’s offices may refuse to provide patients with treatment over unpaid bills.
Which debts may discharge with a Chapter 7 bankruptcy?
A Chapter 7 bankruptcy eliminates consumer debts such as credit card bills, personal loans and medical expenses. If you earned less than Tennessee’s average monthly income for the past six months, you may qualify for relief in the Volunteer State. The court may discharge all your unpaid medical debts regardless of how high they seem.
If you had major surgery, for example, you may no longer have responsibility for paying outstanding bills to a surgeon or hospital that provided your care. Your credit cards also discharge, and a bankruptcy appears on your credit report for up to 10 years. If you require a subsequent medical procedure, you may not qualify for financing without a co-signer.
How may I maintain relationships with my doctors through bankruptcy?
If you have established relationships with a team of medical practitioners, you may consider filing for a Chapter 13 bankruptcy. Unlike Chapter 7, this type of bankruptcy creates a monthly payment plan arranged through the court. You would make monthly payments over the next three to five years, but you may also preserve your existing health care relationships.
By preparing a schedule of your income and expenses, you may determine which bankruptcy could improve your circumstances. Chapter 7 generally discharges all outstanding consumer debts, and Chapter 13 creates a payment plan that meets your monthly budget.