I owe my dentist over $1,000. I recently filed for Chapter 13 bankruptcy. I’d like to pay the overdue bill so that I can get more dental services performed. Can I do this? And can I pay for new dental services during my case?
Unless you are paying 100% of your debts through your Chapter 13 plan, you cannot and should not pay your dentist for any pre-petition bills outside of your Chapter 13 plan. Here’s why.
Your Chapter 13 Plan Determines How Much Creditors Get Paid
When you filed for Chapter 13 bankruptcy, you included a plan to repay your creditors over three to five years. You were required to include all debts you incurred before you filed (called pre-petition debts), both secured and unsecured, in the Chapter 13 plan. The repayment plan sets forth how much each of your creditors will be repaid. The trustee uses your plan payments to repay your creditors, including your dentist.
Your dentist will still get paid at least a portion of the bill, provided you make all the required plan payments. He will have to file a proof of claim to receive payments. Then, he will be paid the same as your other unsecured creditors. So, if your plan calls for payments on unsecured debt at the rate of 10%, then your dentist will eventually be paid $100 (10% of the $1,000 bill) through your bankruptcy. To learn more about how creditors are paid through your Chapter 13 plan, see The Chapter 13 Repayment Plan.)
You Cannot Prefer One Creditor Over Another
In bankruptcy, you cannot treat one unsecured creditor more favorably than other unsecured creditors. If you were to pay the dentist directly (outside of your plan payments), you would be “preferring” him over your other creditors – and this is not allowed.
Your Dentist Is Prohibited From Collecting the Bill
Your dentist cannot demand or insist that you pay that bill – this is prohibited by bankruptcy’s automatic stay. And if you complete the plan and receive a discharge, the dentist is permanently prohibited from trying to collect that bill from you.
Paying Your Dentist When Your Bankruptcy Is Over
Even though you are not legally obligated to pay your dentist for the services he performed before you filed for bankruptcy, you can offer to pay him voluntarily. However, because you cannot do that until your bankruptcy is over, he may have to wait for three to five years. If he’s willing to wait, however, this could be a good option for you.
Paying for Dental Work Done After You File for Chapter 13
Normally, while you are in a Chapter 13, you are not allowed to incur more debt unless you get court permission first. (Although with medical services, this is sometimes impractical to do, especially if you need urgent care). If you do not tell the court about any new dental bills, you may have to pay them yourself outside the plan. This could put your plan at risk since you are supposed to be paying all of your disposable income into the plan.
Another option is to try to get court approval to include the new bill in your current Chapter 13 plan. If your dentist agrees to this, he can file a proof of claim and the post-petition debt will be paid as a special claim, usually at 100%. If your dentist does not want to be paid this way, then he may have to wait until after your Chapter 13 is finished before he can collect the full bill from you.
Be careful. Adding post-petition claims may affect the feasibility of your Chapter 13 plan. Check with your trustee or attorney to make sure this will work.
(To learn more about medical and dental bills when you file for Chapter 13 bankruptcy, visit our Medical Debt in Bankruptcy topic page.)