If you have accumulated medical bills and you cannot pay them, your medical bills may be discharged. Medical bankruptcy is more common than you may imagine. Medical bills are in the group of debt called unsecured non-priority debt.
What is unsecured debt?
Unsecured debt is an obligation or debt that does not have a property as a collateral to secure the payment. When the borrower or debtor falls behind on making payments on this type of debt, the creditor can not take any of the property without first suing and getting a court order.
Unsecured debt is also separated into priority and non priority. Unsecured priority debts are nondischargeable, while most unsecured non-priority debts are dischargeable and in the case the debt is not discharged, it is the last debt to get paid.
Surprisingly even with health insurance, medical bills is one of the main reasons why people seek for bankruptcy. In bankruptcy, medical bills are unsecured non priority, and could be removed or discharged when filing for bankruptcy.
If you declare Chapter 7 bankruptcy, it will discharge your medical bills together with other unsecured debt. While if you declare Chapter 13 bankruptcy the total debt of your medical bills will be added to the other unsecured debts and included in the total amount on your repayment plan.
If your debt is mostly caused by medical bills, and you are eligible for Chapter 7, this may be the easiest and best choice, because Chapter 7 has not limit in regards to the amount of medical debt you can discharge.
If you need to know more about what to do to discharge your debt caused by medical bills, give us a call today. We help our client file bankruptcy. We, at Mendez Law, want to make sure our clients have peace of mind.