Medical debt can be debilitating which is why consumers struggling with it should be familiar with the bankruptcy options that may be able to help. Medical debt can be eliminated in bankruptcy and different personal bankruptcy protection options may help.
Eliminating medical debt in Chapter 7 bankruptcy
Medical debt can be discharged in the Chapter 7 bankruptcy process. Chapter 7 bankruptcy is a liquidation bankruptcy process that allows the filing party to liquidate their assets to pay off their debts. Filing parties will need to qualify for Chapter 7 bankruptcy through the means test. The means test looks at the filing party’s income not including necessary expenses and compares it against the state’s average income. If the filing party’s monthly income is less than the state’s median income, the filing party qualifies for Chapter 7 bankruptcy.
Eliminating medical debt in Chapter 13 bankruptcy
Medical debt can also be addressed through the Chapter 13 bankruptcy process. Chapter 13 bankruptcy is available for filing parties who do not qualify for Chapter 7 bankruptcy and have a reliable source of income to repay some of their debt according to their repayment plan. The medical debt can be included in the repayment plan and can be repaid over a period of time and may not have to be fully repaid.
Chapter 7 bankruptcy can help discharge medical debt, while Chapter 13 bankruptcy can help the filing party repay medical debt over a period of time according to a repayment plan worked out with the bankruptcy court. Either option can help the filing party eliminate medical debt and enjoy debt relief.
