Sometimes it’s a catastrophic illness like cancer or a heart attack. Other times it’s just high deductible insurance premiums or co-pays. Quite often, it is the combination of illness and missed work due to illness that prompts a medical bill problem. Whatever the cause, medical bills are one of the leading reasons why people file bankruptcy.
Medical bills are unsecured debts – this means that there is no collateral for the debt. If you are unable to pay what the hospitals or doctors want on a medical bill, the provider may sue you resulting in wage garnishments, bank account garnishments, and liens against your real estate.
While there is no such thing as a “medical bankruptcy,” chapter 7 or chapter 13 bankruptcy will help you get your medical bill problem under control.
Even medical debts that have been reduced to a judgment are discharged in bankruptcy. In a typical chapter 7 bankruptcy, a discharge in bankruptcy means that the medical debts are just wiped out. In a chapter 13 bankruptcy, all or a portion of the medical bills are paid through a plan with any remainder discharged at completion of the plan.
In both Illinois and Missouri, spouses are liable for each other’s debts if incurred during the marriage. A joint bankruptcy chapter 7 filing may be necessary to discharge joint liabilities.
Life has a lot of challenges and health problems are a big concern for a lot of people. The law does allow a fresh start through the bankruptcy process if your medical bills have gotten to the point of being out of control.