Medicare & Chapter 7/Chapter 13
If you're worried about medical expenses pushing you to file for Chapter 7 or Chapter 13 bankruptcy, you're not alone. A 2007 study found that 62 percent of all bankruptcy filers in the U.S. cited medical bills as one reason for their financial distress.
If you're ready to speak with a lawyer about how your medical bills might be affected by a Chapter 7 or Chapter 13 bankruptcy filing, please fill out this form and arrange a free, no-obligation consultation today.
Medicare and Personal Bankruptcy
Needing bankruptcy protection because of daunting medical bills is nothing to be ashamed of – even if you have medical insurance.
- Bankruptcy and medical insurance: Of the 62 percent of bankruptcy filers who cited medical bills as a major contributing cause to their financial distress, 78 percent had medical insurance (either private or Medicare/Medicaid).
- Medical bills in Chapter 7 bankruptcy: Chapter 7 bankruptcy can offer filers a complete discharge of some or all of their unsecured debts. Because medical bills are unsecured (that is, they're not connected to any property), they are often eligible for a discharge in Chapter 7 cases.
- Medical bills in Chapter 13 bankruptcy: Chapter 13 bankruptcy gives filers an opportunity to catch up on payments for many of their secured loans by making payments in a three- to five-year repayment plan. In Chapter 13 bankruptcy, medical bills would have lower priority than those secured by property, and so might be excused partly or in full.
Deciding Which Type of Personal Bankruptcy Might Work for You
If you determine that personal bankruptcy might provide you the relief you need from your personal debts, the next step is to figure out your eligibility and which type of bankruptcy might better suit your needs: Chapter 7 or Chapter 13.
- Chapter 7 bankruptcy: Sometimes called "liquidation" or "straight bankruptcy," this type of bankruptcy tends to work well for filers who have little income and few valuable possessions. Chapter 7 cases tend to move quickly because filers are not required to enter a repayment plan.
- Chapter 13 bankruptcy: Also known as "reorganization," this type of bankruptcy requires that filers have a steady income source in order to make regular payments on their secured loans. This type of bankruptcy may allow filers to hang onto valuable possessions like cars, homes, family heirlooms, etc.
Determining which chapter could work best for your needs depends on a number of factors, and is not a decision to be taken lightly.
Find a Bankruptcy Lawyer in Your Area
If you're ready to find out more about how your Medicare debt and/or medical bills might work in bankruptcy court, take advantage of this opportunity to speak with a bankruptcy lawyer practicing near you.