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Why is medical debt considered an unsecured debt?

On Behalf of | Feb 22, 2021 | Eliminating Medical Debt

Medical debt is a problem for many Indiana residents. It can come out of nowhere – an otherwise healthy Indianapolis resident may suffer an accident or sudden illness and find themselves hospitalized for days or even weeks. When they emerge from their ailment they may be left with significant medical bills that they cannot pay.

Dealing with and eliminating medical debt can be an arduous process. Though it is not impossible, it is often made easier with the support of a knowledgeable bankruptcy and debt relief attorney. This post about medical debt is not provided as legal advice. Its contents are general and individuals with medical debt questions should reach out to their legal representatives for support.

Medical debt is an unsecured debt

Unlike a mortgage or a car loan, medical debt is unsecured. That means that there is no property attached to it that can be repossessed or taken back if payments cease. Medical services are just that – services – and once a person is released from medical care there is nothing a doctor, hospital, or provider can take from them that can offset the costs of what was provided. Medical debts therefore go to collections for repayment.

Ways to address medical debt

Some medical debt can be managed by working with medical providers and their billing agents. An individual may be able to spread their payment out over time or reduce the amount they must pay each month. For those who cannot deal with medical debt through negotiation, bankruptcy may be available.

Both Chapter 7 and Chapter 13 bankruptcy can help debtors take control of their medical debts. The choice of which to pursue should be made by a debtor with the guidance and support of a legal professional. Getting out from under medical debt can be hard, but doing so can allow an individual to move their life forward and find financial freedom for themselves and their families.