What Is Medical Bankruptcy?

Medical-Bankruptcy-800x532Unfortunately, some people will be faced with medical issues that cause a huge strain on the family finances.  Even though you may have health insurance you may still be faced with substantial bills that are not covered by the insurance.  A major illness or accident can strip the family of all their savings and retirement funds and still not be enough to cover all the medical expenses.

In order to try and cut costs some patients cut back on their medicines or do not take the prescriptions at all.  Or, they may try to return to work too soon.  These practices may lead to worsening of the medical condition.

Even if you have good credit if you incur a large medical bill you are unable to pay and the bill is sent on to a collection agency your good credit rating is going to go down.

hospital-billsIf you find yourself facing substantial medical bills from a physician or hospital you first might want to try working out some kind of repayment plan with the creditor.  Many medical providers are very good about working with patients who are burdened with large bills not covered by insurance.  They may waive some of the charges and may work out a settlement for a lesser amount.

If you still cannot handle the outstanding bills then you might want to consider a medical bankruptcy.  Filing bankruptcy for the medical bills will give your credit score a downturn so you will probably want to explore other options first.

If you still need to file bankruptcy for medical expenses you may be able to file for a Chapter 7 bankruptcy.  If  you do not earn a lot of money and have little or no assets  you may qualify for Chapter 7 for the medical debt.  In this event the medical debt, which is an unsecured debt, will be wiped out.

If you do not quality to file for Chapter 7, then you may be able to file Chapter 13 for your medical debt.  Under this plan you will need to pay a portion of the debt using a repayment plan set out for you and the balance of the medical debt will be discharged.

You will want to consult an attorney to explore your options when it comes to filing for a medical bankruptcy.