Medical Bills are one of the most common reasons for bankruptcy in the United States. For most people, filing bankruptcy with an Oklahoma City bankruptcy attorney may be the only solution. Below is a guide to help you understand how filing for bankruptcy can help you eliminate or consolidate your medical bills.
Overview of Medical Debt
Some debts are considered a priority and cannot be discharged through bankruptcy. Medical bills, fortunately, do not fall under this group.
In bankruptcy, medical bills are similar to credit cards in that they’re considered general unsecured debts. This means that medical bills are a type of debt that can be eliminated through a bankruptcy filing.
Chapter 7 Bankruptcy and Medical Debt
You can get rid of most or all of your debts by filing for Chapter 7 bankruptcy. All bills and other unsecured debts will be forgiven if you qualify for Chapter 7.
There is no limit to how much medical debt you can discharge in Chapter 7. You must, however, pass a means test to demonstrate that your income is sufficiently low in order to qualify for this sort of bankruptcy.
All bills paid using a credit card, as well as all other credit card debt, will be forgiven.
Chapter 13 Bankruptcy and Medical Debt
Your debts are consolidated in Chapter 13 bankruptcy, and you pay a portion of them back overtime on a payment plan. Medical debts are included in this strategy. Your Chapter 13 payment is determined by your income, spending, and assets.
Creditors receive a share of the money you pay toward your debts under Chapter 13, which is usually a relatively tiny fraction of the total amount you are obligated to pay.
Keep in mind that you may not be eligible for Chapter 13 bankruptcy if your medical and other debts exceed specified debt limits, which are currently capped at $419,275.00.
Here at Hilbern Law, we recognize that filing for bankruptcy can be a confusing and exhausting process. We are here to advocate for you. Give us a call today at (405) 213-1919.