Did you know approximately 41% of Americans have some medical debt? If you are facing medical debt and the amount, along with your other obligations, is suffocating you, it may be time to consider bankruptcy.
However, before moving forward and filing for bankruptcy relief, there are a few things to know about how medical debt is treated.
Filing a medical bankruptcy
The term “medical bankruptcy” is not an official one; however, it is what many people call a bankruptcy filed because of medical expenses. Unfortunately, the cost of medical care in the U.S. is significantly higher than in other countries due to many factors. Examples include high physician salaries, limited regulation on prescription drug costs and more.
As a result, even a seemingly simple procedure can result in tens of thousands of dollars in medical debt. The average family, living paycheck to paycheck, may see no viable option to cover this debt. This is when bankruptcy may be ideal.
Choosing how to eliminate medical debt
You can alleviate the need to immediately pay medical debt by filing for bankruptcy. With Chapter 7 bankruptcy, you can erase this debt. Be sure to include all doctors you have seen and the costs incurred. There is no going back to add to the list after the documents are filed. Additionally, once filed, everyone on your list will be notified that they can no longer contact you about the debt.
If you file Chapter 13 bankruptcy, your medical debts will be restructured, with your other debts, and you will have a payment plan to pay off the debt. Once the payment plan is complete, any remaining debt is (usually) discharged.
If you are dealing with excessive medical debt, filing for bankruptcy may help. Be sure to know your options to make the right decision for you and your family.