Will filing Chapter 13 bankruptcy help me discharge medical bills?

Many people are driven to bankruptcy by high medical bills, health conditions that prevent them from earning a living, or both. The good news is that, whether you file for bankruptcy under Chapter 7 or Chapter 13, you can discharge your medical debt in bankruptcy. 

Most people who choose Chapter 13 do so either because they aren't eligible to use Chapter 7 (typically because their income is too high to pass the means test) or because they have valuable nonexempt property they want to keep. In Chapter 7, the trustee can take any nonexempt property, sell it, and distribute the proceeds to creditors. In Chapter 13, however, the trustee doesn't take any property. Instead, you enter into a repayment plan to pay off some or all of your debt over three to five years. 

Your Chapter 13 repayment plan must pay certain debts in full, including child support and back taxes. If you want to keep property that's subject to a secured debt, you must also pay off any arrearages on the secured debt in full -- and stay current on your payments going forward. For example, if you've fallen behind on your car payments, you can make up the missed payments in your plan and keep making your monthly payments from now on. 

As for debts that aren't secured and aren't of the type that must be paid in full, the amount you have to repay depends on your disposable income and your property. These creditors must receive at least as much as they would have gotten if you had used Chapter 7: the value of your nonexempt property. And, you must pay all of your disposable income -- what's left after paying certain allowed expenses -- into the plan. As long as you have met these requirements, these debts will be discharged at the end of your Chapter 13 case, whether you've paid them in full or have barely made a dent in what you owe. Medical debts fall into this category. So, as long as your repayment plan follows these rules and you make all the required payments, your medical debt will be discharged at the end of your bankruptcy case.