Medical debt has a way of weighing even the most cautious individuals down. It’s nearly impossible to predict when a medical emergency will happen, and it can be tough to figure out how much your insurance will cover (if you have insurance at all). You have to be cautious about being overbilled or having providers who are out of network affect your insurance claims, too.
When all is said and done, it may be that you are overwhelmed with debt. The good news is that medical bills are dischargeable in bankruptcy, because they are unsecured. If you file for a Chapter 7 bankruptcy and qualify, then you may be able to have the medical bills discharged completely.
If you don’t qualify for Chapter 7 bankruptcy, does Chapter 13 resolve medical debt?
With Chapter 13 bankruptcy, your medical bills and other debts will all be consolidated together. You’ll need to pay those debts for the next three to five years, depending on your circumstances. The total amount you have to pay each month is dependent on your equity, assets, bills and other income and expenses. You’re more likely to qualify for Chapter 7 bankruptcy if you cannot pay your bills or don’t have enough income to pay a monthly payment.
There are debt limits in Chapter 13 bankruptcy that may impact if you can discharge medical debt in this way. Unsecured debts must be less than $394,725. If you have particularly high medical debt, then Chapter 13 bankruptcy’s limit may be too low. In that case, the better option is to look into qualifying for Chapter 7 bankruptcy, since it has no limit on the amount of debt that can be discharged.
What else can you do to reduce how much you owe?
You may be able to reduce how much you owe to hospitals or other medical providers by negotiating with them directly or offering a settlement that is lower than the total you owe. However, if your debt is still too high, then turning to bankruptcy is an option. There are ways to eliminate excessive debts, so that you don’t have to struggle.