It’s estimated that between 25% and 50% of all bankruptcies include a significant amount of medical debt. Those who are struggling financially may find that unexpected medical bills are the final straw that causes them to file for bankruptcy to clear all of their debt.
If you have recently incurred a significant amount of medical debt, you are likely feeling overwhelmed mentally. Not only do you have health issues to worry about, but you are also probably feeling trapped by your financial situation. While many aspects of your circumstances are likely to be out of your control, it is important that you identify the aspects that you can influence, and take action accordingly.
Is there a specific type of bankruptcy for medical debt? No type of bankruptcy is created for the sole purpose of addressing medical debt. This is because bankruptcy laws consider all debt to be the same, with the exception of debts owed to the government or delinquent child support payments. Therefore, the best bankruptcy filing for you will depend on your individual financial situation, rather than the type of your debts. Those who have a very low income typically qualify to file for Chapter 7 bankruptcy. Those who have a stable income must usually file for Chapter 13 bankruptcy.
Will my doctor refuse to treat me?
Many people worry about the implication a medical bankruptcy will have on their health care. To mitigate this worry, in 1986, Congress enacted the Emergency Medical Treatment and Active Labor Act. This prevents hospitals from refusing to treat patients who can’t afford to pay their bills.
However, filing for bankruptcy does present certain risks when it comes to maintaining services from your medical providers. This is because medical providers do reserve the right to refuse you treatment if the debt you owed them was previously discharged in bankruptcy.
Many people delay filing for bankruptcy until they know that it is an absolute necessity. Keep assessing your financial situation so that you do not delay action. By filing for bankruptcy, you can benefit from a fresh financial start, which can be a huge relief and can allow you to start enjoying life again.