How may a bankruptcy affect my future medical care?

 Posted on March 07, 2022 in Medical Debt and Bankruptcy

Unpaid medical debts may result in overwhelming financial hardships. Many Americans file for bankruptcy to find relief from unmanageable medical bills or to avoid losing their homes. As noted by Credit Karma, some bankruptcy petitioners may wish to continue paying their medical bills because it helps them maintain their relationships with health care providers.

When you file a bankruptcy petition, you must list all your outstanding debts. Based on whether you file for a Chapter 7 or Chapter 13 bankruptcy, your doctors may not receive payments for outstanding balances. In some cases, health care providers may stop seeing patients with unpaid or discharged debts.

Chapter 7 may discharge medical bills

Maryland residents must pass a means test to qualify for Chapter 7 bankruptcy. If your household income is below the average annual income for a Maryland family of the same size, you could file for Chapter 7.

The current average income for a household of four, for example, is $130,252. If you earn less than that amount, you may submit a Chapter 7 petition. With a bankruptcy discharge, the court may release you from paying the remaining balances for most consumer debts, which generally include medical bills.

Chapter 13 arranges a repayment plan

If you have a steady income and earn over the average annual income for a household of your same size, you may file for Chapter 13 bankruptcy. A trustee of the court works with you to repay some of your creditors over the next three to five years. You may then continue paying your medical debts, which could help maintain relationships with your healthcare providers.

Bankruptcy offers individuals with unmanageable finances an opportunity to regain control. It does not matter how much medical debt you incurred. Your petition may include bills sent to collections or for co-pays and out-of-pocket medical expenses charged to credit cards.