Medical Bankruptcy

Medical bankruptcy is a general term referring to the cause of why somebody had to file bankruptcy.  Medical bankruptcy is not a legal term and you technically can’t file a “medical bankruptcy.”  If you have a lot of medical bills and need to file bankruptcy, you would file either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, and you would include all of your medical bills along with your other unsecured debts.  They would be discharged at the conclusion of your bankruptcy, just like an unsecured credit card or loan.  You are required to list all of your creditors, including medical bills, when you file bankruptcy.

Filing for bankruptcy due to medical conditions is one of the most common reasons for filing bankruptcy.  In fact, according to an article at CNN about a Harvard Medical School study, over 60% of all medical bankruptcy filings are linked to medical bills, with seniors and single mothers being at the highest risk.

Medical bills can easily be thousands of dollars, and without insurance, many incomes simply aren’t enough to ever repay the debt.  Many individuals who do have health insurance also need to seek out bankruptcy protection because a percentage of the total bill is often the responsibility of the patient.  In fact, studies have shown that nearly 80% of all bankruptcy filers had health insurance.

Can my doctor refuse treatment if I file medical bankruptcy?  Sometimes doctors will no longer continuing treating you if you have filed bankruptcy on a debt owed to them.  However, under federal law, a hospital that receives federal funding cannot refuse treatment based on non-payment of a past due bill.  If this is a concern, I would recommend contacting your doctor and explaining that you need to file bankruptcy and that your bankruptcy attorney has advised you that you must include all of your creditors.  Then simply ask what their policy is.  At a minimum, the doctor will typically come to some sort of a payment arrangement that is acceptable to you both.

Nobody sets out in life planning on filing bankruptcy, but a major injury or long-term injury can easily cost $30,000 or more in out of pocket expenses.  For the majority of us that are living paycheck to paycheck, repaying a debt like this just isn’t a reality and bankruptcy might be the best answer.

Consult with a local bankruptcy attorney to determine if you need to file medical bankruptcy.

– BKHQ Bankruptcy Lawyer

Natalie Conatser

Author: Natalie Conatser

Natalie is a finance professor who writes all about finance as a blog contributor. She is a board certified accountant and also knows a thing or two about debt and avoiding bankruptcy. Natalie plans on touring the US to speak about personal finance.

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