Filing Bankruptcy on Unmanageable Medical Bills

Bankruptcy can save you from medical bills which you can't pay. In fact, excessive medical bills is a leading cause of bankruptcy in this country.

The Medical Bill "Scam"

First, it's important to recognize that getting in trouble with medical bills--having bills you can't pay--is not your fault. Medical bills are ALWAYS overinflated; that's because medical care providers deliberately bill high, knowing that many of their main sources of payment, such as Medicare, will only pay a fraction or portion of the bill. The fact is, medical costs are so high in this country that unless you have very comprehensive, almost unlimited medical insurance, if you or a loved one are faced with an accident, a serious disease, or a chronic condition, you will almost certainly end up owing an amount payable only by the wealthy. Recognizing this--that the nature of the system makes unmanageable and excessive bills almost inevitable for anyone who needs significant medical resources--you should not feel bad about using legal means to protect yourself from those bills.

How Bankruptcy Can Help You

Bankruptcy is designed to give debtors a second chance, while paying creditors--including medical care providers--as much as is reasonably possible. Bankruptcy works best against unsecured debts, or debts where there is no property acting as collateral--like medical bills. When bankruptcy is filed, the debtor will either have to live according to a court-mandated payment plan--a budget--for several years, under which the debtor will pay creditors what he or she can; or the debtor will have some, possibly most, of his or her assets liquidated and given to creditors. After the repayment plan is completed, or the assets have been liquidated and distributed, the remaining balance of almost all unsecured debts are discharged, or eliminated. Even if the creditor only received dimes, or even pennies, on the dollar, once the debtor has paid what he or she can, the debt is gone.

There are a very few types of debts that, under law, cannot be discharged. However, debts for medical care are not one of them; medical bills are, in fact, a type of debt that bankruptcy works very well on.

How an Attorney Can Help

Deciding when bankruptcy is appropriate, which type of bankruptcy is best, and then taking advantage of legal exemptions to protect as much of your property as possible can be complicated, but an attorney can help a debtor navigate the bankruptcy process and eliminate unmanageable, unsupportable, medical debt.