Medical debt is one of the most common reasons why American’s file for bankruptcy. With the rising cost of medical debt, many are looking to get help or even rid this debt by filing bankruptcy. Filing either a Chapter 7 or Chapter 13 bankruptcy can help you with your medical debt. Here’s how:

Chapter 7 Bankruptcy & Medical Debt: Filing a Chapter 7 bankruptcy will successfully discharge all of your medical debt. There’s no maximum or minimum dollar limit and this is debt that you do not need to pay back. In order to file a Chapter 7, you need to pass a means tests. This test will look at your income & expenses. Keep in mind, you will need to keep paying for your health insurance during and after a Chapter 7 bankruptcy, but your medical debt can be completely discharged after your bankruptcy. You may want to file a Chapter 7 if you are consistent and up to date on all other payments other than your medical debt.

Chapter 13 Bankruptcy & Medical Debt: Filing a Chapter 13 essentially discharges your medical debt, but it will combine your debt & bills and you will still need to pay back some of this debt. Like Chapter 7, you’ll need to see if you qualify for Chapter 13. Chapter 13 is based on your income, debt, bills, equity, assets, etc. Unlike Chapter 7, the debt limit for filing a Chapter 13 is less than $394,725. If your total debt is less than this number, you will be able to have majority of your medical debt dismissed and only pay back a small portion of it.

If you are struggling with medical debt and are interested in filing bankruptcy, but you aren’t sure which you qualify for, call (214) 265-0123 for a free initial consultation with our firm.