Can I File For Bankruptcy Over Medical Bills?

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Medical debt is a pervasive issue in the United States, leading many individuals into significant financial hardship. If you are drowning in medical bills and are considering bankruptcy as a solution, it’s crucial to understand the various options available and their potential long-term consequences. Here, we will explore filing for bankruptcy over medical bills, explain the different bankruptcy types available, and discuss how consulting a bankruptcy attorney can guide you through this challenging process.

Medical Bills and Bankruptcy in the U.S.

Medical bills remain a leading cause of bankruptcy filings in the U.S. When an unexpected medical emergency strikes, uninsured or underinsured individuals can face substantial bills that quickly spiral out of control. Many people find themselves unable to pay for essential treatments while managing everyday living expenses. Filing for bankruptcy over medical bills can offer relief, but it’s essential to understand the intricacies of each bankruptcy chapter and how they impact your financial situation.

Understanding Chapter 7 Bankruptcy

What It Is

Chapter 7 bankruptcy is commonly known as “liquidation bankruptcy.” It allows individuals to discharge most unsecured debts, including medical bills, through a court-supervised process. The goal is to provide individuals facing significant financial hardship with a fresh start.

How It Works

In Chapter 7, a bankruptcy trustee liquidates certain non-exempt assets and uses the proceeds to repay creditors. Once the assets are sold and creditors paid to the extent possible, the court will discharge the remaining eligible unsecured debts, such as credit card debt and medical bills. This discharge releases the debtor from further obligation to repay these debts, providing much-needed relief for those burdened by high medical expenses.


While Chapter 7 bankruptcy offers a clean slate, not all assets are protected, and some non-exempt property may be sold. It also impacts your credit score for up to 10 years, potentially affecting future borrowing opportunities.

Exploring Chapter 13 Bankruptcy

What It Is

Chapter 13 bankruptcy, also known as the “wage earner’s plan,” allows individuals to restructure their debts into a manageable repayment plan. It provides an opportunity to catch up on missed payments, offering a chance to avoid foreclosure and repossession.

How It Works

In Chapter 13, the debtor proposes a repayment plan lasting three to five years. This plan consolidates debt into manageable monthly payments, allowing individuals to retain assets like their home and car while catching up on overdue accounts. At the end of the repayment term, remaining unsecured debts, including medical bills, can be wiped out.


This form of bankruptcy is suitable for those with a regular income who can commit to the payment plan. Although it allows for debt relief without asset liquidation, Chapter 13 bankruptcy remains on your credit report for seven years, impacting your financial future.

Consequences of Filing for Bankruptcy Over Medical Bills

While bankruptcy can provide a fresh start by relieving overwhelming medical debt, it is not without long-term consequences. Your credit score will take a significant hit, and the bankruptcy record will appear on your credit report for up to a decade, making it harder to secure loans or favorable interest rates. Additionally, it may influence future employment opportunities if employers conduct credit checks.

Consulting a Bankruptcy Attorney

Given the complexities and potential consequences of filing for bankruptcy over medical bills, consulting a bankruptcy attorney is essential. They will assess your unique financial situation and guide you in choosing the most appropriate bankruptcy chapter or suggest alternative debt management solutions. A knowledgeable attorney ensures you understand the implications and prepares you to regain financial stability.

In Summary

Filing for bankruptcy over medical bills can be an effective way to manage unmanageable medical debt, especially through Chapter 7 or Chapter 13 bankruptcy options. Understanding these processes and their consequences will help you make informed decisions. A bankruptcy attorney can offer valuable guidance throughout the process, so don’t hesitate to contact us for assistance.

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Jeffrey L. Wagoner


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