At McElroy & Associates, We Understand That Bad Things Can Happen To Good People

Get A Fresh Start Through Bankruptcy

Can you file for bankruptcy to alleviate medical debt?

On Behalf of | Jun 23, 2022 | Chapter 13 Bankruptcy |

financial worries can afflict any Tennessee consumer. If you have had an unexpected medical crisis, you could be left with significant debt. You might wonder if you can file for bankruptcy to alleviate your medical bills.

Can you discharge medical debt in bankruptcy?

If you struggle with medical debt, you can find some relief by filing for bankruptcy. Medical bills are a type unsecured debt, which can be discharged through bankruptcy.

While bankruptcy should always be used as a last resort option for alleviating your debt, it might be the best tool available to you if you’re struggling to pay your medical bills. It can put a stop to calls from collection agencies trying to recover the money you owe.

What can you expect with medical debt when filing for bankruptcy?

Only individuals with little income and no to very few assets can file Chapter 7. Even if you only have medical debt, you can file. Your debt must be significant and enough that you have trouble paying it back. Filing for Chapter 7 can discharge your medical debt and any other unsecured debts you hold.

For those who earn a higher income, it might not be possible to file Chapter 7. Chapter 13 bankruptcy is the option that’s available. The biggest problem in paying back medical bills with a healthy financial situation normally revolves around the date that the debt is due. Chapter 13 bankruptcy can help to reorganize your debts and give you the opportunity to pay back a portion of your medical debt through a repayment plan that lasts three to five years. Once your bankruptcy case ends, the court will discharge the remainder.

If you have serious medical debt and no foreseeable way to pay it back or pay it back on time, bankruptcy might be the best option to help you eliminate it.