Even with the best insurance, medical bills can become a crippling weight for many families. If you find you cannot handle your bills for your hospital or doctor visit, it may be time to consider bankruptcy. There are two main options that will handle your medical expenses differently, depending on your situation.
The first thing to know is that medical bills are considered “dischargeable debt.” This means that if the court grants your bankruptcy, you are no longer held personally liable for it. This is especially important if you are considering chapter 7 bankruptcy.
Under chapter 7, the debtor is essentially freed of debt. Assets are liquidated to cover as much debt as possible, but you get a fresh start, free of hassle from creditors. There are requirements that must be met before filing for chapter 7, however. The main one is that you generally must make under the state median income. For an Ohio family of four, that is about $77,000 a year. There are special circumstances that will allow a higher-income family to declare chapter 7 bankruptcy, but generally making more money means filing for chapter 13.
With chapter 13 bankruptcy, you are still responsible for paying off your debt. But, you are given more flexibility to do so. Chapter 13 puts you on a payment plan, generally five years, in which you can pay off the debt. This option is great for getting back on your feet if you faced sudden hardship. If you cannot pay off the debt in that time, you may qualify for chapter 7.
If you are struggling with medical bills, it is important to contact an experienced attorney who can help you with the bankruptcy process. They can give you legal counsel and advise you on the best process for you and your family to get back on your feet again.