If your family has amassed an overwhelming amount of debt due to an unanticipated injury or illness, you may be considering bankruptcy. Thankfully, medical bills are dischargeable. Whether you should eliminate them using chapter 7 or chapter 13 will depend on the circumstances, though. Here’s what you should know about both approaches. 

Chapter 7

If you have little to no disposable income, you may be eligible for chapter 7 bankruptcy. This method discharges applicable debts, including medical bills, immediately. There is no limit to the amount of debt you can discharge through chapter 7, making it ideal for those who have accrued hundreds of thousands—or even millions—in hospital bills. However, chapter 7 will remain on your credit report for ten years, so it’s important to consider the impact it will have on your creditworthiness before you actually file. 

Chapter 13  

If you earn too much income to qualify for chapter 7, you may be able to erase medical bills by filing chapter 13. This approach essentially reorganizes debts and requires petitioners to commit to a 3- to 5-year repayment plan. Any applicable debts that remain after the plan has ended are then discharged.

Unlike chapter 7, though, there is a limit to the amount of debt you can wipe out using chapter 13. As of 2019, the unsecured debt limit is $419,275. If your medical bills exceed this amount when combined with other unsecured debts, like credit cards, you may be ineligible for chapter 13. 

If you want to wipe out medical bills by filing bankruptcy, turn to Padgett & Robertson, Attorneys at Law for guidance. Based in Mobile and counseling clients throughout Southern Alabama since 1978, this law office offers free consultations complete with a detailed financial analysis to every prospective client considering bankruptcy. To request an appointment with a knowledgeable member of their team, call (251) 342-0264 or reach out on their website. 

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.

We are a debt relief agency. We help people file for Bankruptcy relief under the Bankruptcy Code.