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Can You File Bankruptcy on Medical Bills?


Are medical bills included when filing for bankruptcy? Yes!

Filing bankruptcy for medical bills is common. Our clients have used bankruptcy protection to eliminate medical bills and many other debts from medical care or otherwise.

To speak with one of the most experienced bankruptcy lawyers in PA about your debt situation and find out how bankruptcy works, call The Law Offices of David M. Offen at (215) 625-9600 or visit his website to schedule your free, no-obligation consultation.

Filing Medical Bill Bankruptcies in Philadelphia

The Children’s Hospital of Philadelphia and the Hospital of the University of Pennsylvania are two of the greatest research hospitals in the world—and their care has the price tag to match. Any trip to the emergency room can result in crushing medical debt. How can you cope?

A stent procedure at the University of Pennsylvania costs over $203,000—and that’s just the surgery. Medications and the recovery stay on a cardiac floor can cost hundreds of thousands of dollars as well. Even with insurance, copays for the best medical care can be devastating.

Carrying a high deductible might seem like a smart way to save money when healthy, but a recent study found that 63% of Americans can’t even cover a $500 emergency without going into debt.

For the uninsured or underinsured, prices are catastrophic.  

Even when a patient qualifies for some level of charity care, they are often left with medical debt. Many self-employed and uninsured people make too much money to qualify for charity care, but still not enough to actually cover their hospital bills.

The US News and World Report found over 11% of Pennsylvanians go without healthcare because they can’t afford it. Does it surprised you that medical bankruptcy is common in PA?

Can you lose your home due to medical bills?

Yes. People have.

It is a tragic fact that common medical conditions like diabetes and heart disease can leave people without the means to pay their medical bills. Falling behind on mortgages or car payments carries an even heavier burden of fear when facing medical emergencies alongside mounting debt.

If you are caring for a sick spouse, it can often feel like there is no way to provide for his or her healthcare and meet financial obligations at the same time. For the retired and elderly, cancer treatments and hospice care can burn through what looked like a comfortable nest egg in a matter of months.

Bankruptcy Freezes Debt Collection

Debt collectors are one of the worst parts of being behind on bills: harassing people on the phone in an attempt to get a person to pay. Filing for bankruptcy triggers an automatic stay to stop collection actions and the resultant stress that they cause.

Declaring bankruptcy will also temporarily freeze foreclosure actions, and might allow you to save your home.

Medical Debt is Usually Unsecured

Unsecured debts are the easiest to wipe out. Priority debts like tax obligations and student loans are usually not dischargeable and can’t normally be forgiven.

Since medical debt is not considered a priority debt, it can be discharged even if your assets aren’t enough to cover it through liquidation or repayment. Whether you file Chapter 7 or Chapter 13 bankruptcy, all of your medical debts can be eliminated in most cases.

How to File Medical Bankruptcies

The first step is to meet with a bankruptcy lawyer. Your lawyer can help you plan your bankruptcy to eliminate debts with the least hardship on your part. The sooner you file, the quicker collections can stop. Filing for bankruptcy can be a hard decision, but stalling will only cause your debts to grow.

Can you file Chapter 13 on medical bills? How about Chapter 7? Which is best for you?

There are advantages to both filings, depending on your goals and whether you have the ability to pay into a Chapter 13 plan. Since most medical debt is unsecured, either filing option, Chapter 7 or Chapter 13, will eliminate your medical debts.

If you didn’t have the income to meet your obligations before the medical debt was incurred, then filing bankruptcy through a Chapter 7 filing might be your best bet. All of your medical bills plus your other unsecured debt, like credit cards and personal loans, will be discharged through successful completion of a Chapter 7 bankruptcy.

If you have the money to pay all of your normal bills, but not your medical debts, the filing of a Chapter 13 case will set up a small payment plan to cover all of your debts. You typically keep your home and property as long as you make the monthly Chapter 13 payments, and your medical debt and other debts such as credit cards and personal loans will only need to be repaid to the limits of your disposable income. The remaining unpaid debt will be discharged after the payment plan has been successfully completed – which takes either three or five years.

How Much Does it Cost to File Medical Bankruptcy?

We have no control over the Court’s fixed filing fees, however, we offer affordable fees and payment plans for filing bankruptcy in Philadelphia.

It is also possible to have the court filing fee waived, under certain circumstances. We will work with you to make sure you get the legal help you need to resolve your debt situation.

When is Filing Bankruptcy for Medical Bills a Bad Decision?

One situation in which filing bankruptcy due to medical debt is not advised is if you have so much equity in your home that it is not exempt and the trustee might seize the property and sell it for the benefit of your creditors. In that case, a Chapter 13 rather than Chapter 7 bankruptcy might be the best course of action to resolve your debt problem. Come in for a consultation with bankruptcy attorney David M. Offen, Esq. and we’ll help you figure out.

Find the Right Philadelphia Medical Debt Lawyer

If you are in Philadelphia or the suburbs, consider meeting with Philadelphia medical bankruptcy lawyer David M. Offen, Esq. Our law firm has helped more than 12,000 clients get a fresh financial start. We’re ready to help you too.

To schedule a consultation now, call The Law Offices of David M. Offen at (215) 625-9600 or fill out the contact form on the right.

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