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Business & Commercial Law : Estate Planning & Litigation : Bankruptcy

Medical debts are typically eligible to be discharged

On Behalf of | Apr 7, 2022 | Bankruptcy

If you visit a Massachusetts hospital or other medical facility, you will likely have to pay a portion of the cost of any services rendered. If you cannot pay an outstanding medical bill, it may be possible to eliminate it by filing for bankruptcy.

Medical bills are considered to be unsecured debts

Generally speaking, a medical bill is considered to be an unsecured debt, which means that it will likely be eligible for discharge in a Chapter 7 proceeding. It’s important to note that you may need to pass a means test to qualify for a Chapter 7 proceeding. If you do qualify for this type of protection from creditors, nonexempt assets will be liquidated to pay them. If you don’t have any nonexempt assets, you may be able to eliminate medical bills and other unsecured debts without paying anything.

Medical debts may also be included in a Chapter 13 proceeding

Unsecured debts may also be included as part of a Chapter 13 proceeding. This version of a consumer bankruptcy allows you to repay your creditors in monthly installments over a period of three or five years. If any portion of an unsecured debt remains at the end of the repayment period, it is usually discharged. Filing for Chapter 13 protection may be ideal if you have a home, car or other property that you would like to retain.

If you are struggling to pay medical bills or other debts in a timely manner, it may be in your best interest to file for bankruptcy. There is a good chance that you’ll receive an automatic stay of creditor collection activities. This means that you won’t receive phone calls, letters or other notices demanding payment while your case is ongoing.