Healthcare costs have an uncanny ability to rise quickly. Even if you have a minor health condition or injury, you may spend thousands of dollars on medical bills. Whether or not you have health insurance, you may be facing the sort of debt that can cripple your financial life. You are not alone, though. In fact, roughly 70 million Americans have some amount of outstanding medical debt, shares Moneymunk.
Bankruptcy may help you get relief from medical debt. Still, choosing to file for bankruptcy protection is a personal decision that only you can make. Before you decide, you should know a few things about medical debt and bankruptcy law.
Bankruptcy allows you to discharge medical debt
As you may know, not all types of debt are dischargeable in bankruptcy. That is, bankruptcy does not take care of all debts you may have. It does, however, tend to eliminate medical debt. Further, hospitals, physicians and other healthcare providers usually have low priority in the bankruptcy process. As such, you may be able to pay other expenses during bankruptcy before tackling medical debt.
The type of bankruptcy you choose matters
If you plan to file for bankruptcy, you have a couple options. If you do not have much wealth, you may qualify for Chapter 7 bankruptcy. This type of bankruptcy allows you to keep some of your property while discharging unsecured and other debts. Chapter 13 bankruptcy is different. If you file under that provision, you come up with a plan for repaying creditors. Under Chapter 13, you may eventually pay a fraction of the medical debt you owe.
If you have sustained an injury or developed a medical condition, you must focus on both your recovery and your overall health. You should not have to worry about mountains of medical debt. Still, medical bills can cause an unbelievable amount of stress. Fortunately, with some bankruptcy planning, you can likely address your debt in a proactive way.