Bankruptcy Due To Medical Debt


Medical debt has driven thousands of Americans into filing for bankruptcy, even more than credit card debt. This is easily understandable considering how expensive even seemingly basic medical procedures can be. This being the case, more and more individuals with high medical debt are asking bankruptcy attorneys whether such debt is dischargeable through filing for bankruptcy.

Essentially, what any Los Angeles bankruptcy attorney should tell you is that medical debt falls under “unsecured” debt because there is no collateral property involved. Secured debt is that which is backed by property which can be repossessed in the event of non-payment.

In addition, medical debt is non-priority debt. This is significant because priority debts such as some types of tax debt or domestic support payments cannot be discharged through Chapter 7 bankruptcy. At the same time, non-priority unsecured debt such as medical debt is typically the last ones to be paid.

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In effect, medical debt is dischargeable in Chapter 7 bankruptcy. In the event that some of the debt is paid off during the bankruptcy process, the rest will probably be discharged as part of the bankruptcy. Chapter 13 bankruptcy is an option as well—in this case, your medical debt would be incorporated into your repayment plan as determined by your income, expenses, and non-exempt assets. It should be pointed out however that there is a limit for medical debts in Chapter 13 and if yours exceeds the limit, you could be unable to file.

If you are dealing with substantial medical debt, you need to speak with an Orange County bankruptcy lawyer who can provide you with needed legal insight so you have the best chance at having your medical debt discharged. Don’t struggle under the heavy burden of debt longer than you have to—Oaktree Law can help you find a way out.

Give us a call today to get started—(562) 219-2979.