What is Medical Bankruptcy?

Visits to the hospital, overnight stays, surgical procedures, physical rehabilitation, and more can be extremely expensive. Medical costs have risen to extremes, and just a minor issue can result in thousands of dollars in expenses. Even with medical insurance, a patient may be on the hook for treatment, and sometimes, the costs can reach hundreds of thousands of dollars. Most people don’t have that type of money in the bank, and in some cases, medical bills can be so high that you might not be able to pay. 

Medical Debt

Medical costs have skyrocketed over the last several decades. The costs for a minor medical emergency can be astronomical. Patients see charges for every exam, medication, evaluation, test, and procedure. These costs can add up quickly, especially if the medical treatment is complex or lengthy. While much of your medical debt will go through insurance, there are many costs that the patient will still have to shoulder on their own. There are limitations to medical insurance. You may not even realize the extent of the money you owe until after you have received care. 

Medical Bankruptcy 

Sometimes, one of the options for resolving medical debt is bankruptcy. The term “medical bankruptcy” refers to bankruptcy that is done to handle medical debt. Medical bankruptcy is not a real legal term, but it is often used to describe the reason someone might need to file bankruptcy. Chapter 7 and Chapter 13 are types of bankruptcies available to consumers, and they may provide some type of relief for medical debt. Medical bankruptcy may offer you a way to get out from under the type of extreme debt that comes from medical costs. 

Types of Bankruptcy

There are two main types of bankruptcy that you may want to consider. Chapter 13 bankruptcy allows for the repayment of debts through consolidation over a period of time. Chapter 7 bankruptcy provides for the liquidation of assets to repay debts. In Chapter 7, if you don’t have enough funds through liquidation to repay the full amount, a creditor may agree to discharge a portion of what you owe. The discharge of debts means that at least part of the amount owed has been forgiven by a creditor, such as a doctor or hospital. 

Is Bankruptcy an Option?

Bankruptcy may be the best choice for those who have medical debt as well as other debts that you are unable to resolve. If your debt is primarily medical, you may have other options to try to resolve it. In some cases, you may want to contest a medical debt. This may be necessary in situations where you don’t agree with the insurance payment or with the services received. Sometimes, a hospital or doctor will negotiate a settlement or reduction in your bill if you are able to pay a portion of it. 

Bankruptcy can certainly lift a huge financial burden from your life and can reduce your stress. 
Bankruptcy can be a major step to take and one that you need to consider very carefully. You will want to discuss the benefits as well as the possible drawbacks of bankruptcy and how it would impact your medical bills. To find out more, contact our experienced legal team at Adam Law Group at (904) 351-0743 for a consultation.