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“Medical Bankruptcy”

Occasionally, I am asked about a “medical bankruptcy.” “Medical bankruptcy,” or a special type of bankruptcy solely for medical bills, simply does not exist.  Medical debt, however, is easily eliminated through both a chapter 7 bankruptcy and chapter 13 bankruptcy as general unsecured debt.

Medical debt is a huge factor for people who consider bankruptcy.  With skyrocketing healthcare costs, bankruptcy cases that I file often contain a good portion of medical debt. But clients generally have two options when filing bankruptcy, a chapter 7 bankruptcy or  a chapter 13 bankruptcy.  There is no carve-out in the bankruptcy code for a “medical bankruptcy,” though, as medical bills are covered in both chapter 7 and chapter 13 bankruptcy cases.

Chapter 7 bankruptcy, as discussed in earlier posts, is a liquidation bankruptcy and lasts about 90 days.  Most debts, including medical bills will be discharged as part of the bankruptcy process.  Chapter 13, or “wage-earner’s” bankruptcy, where a client makes monthly payments for 3-5 years, covers medical debt as well.

Therefore, “medical bankruptcy” is a myth in terms of a special type of bankruptcy.  However, medical debt is included as a dischargeable debt in both chapter 7 bankruptcy and chapter 13 bankruptcy.

If you are interested in learning more about bankruptcy and how medical debt may be eliminated through bankruptcy, please contact me for a free in-office bankruptcy consultation.

Tom Butcher, Attorney At Law

Tom Butcher is the owner and attorney at Butcher Law Office, LLC. He represents clients in financial distress in Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Tom offers a friendly, respectful, and compassionate experience for clients who are in financial and legal distress. Rather than taking a mechanical approach to filing bankruptcy for clients, like other bankruptcy firms, Tom strives to offer a personal, one-on-one experience, where the client’s situation is of utmost importance. Tom believes this personal attention keeps him connected to the community, and serves his clients best during their bankruptcy.
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