How Filing for Medical Bankruptcy Can Help With Health Insurance

Unmanageable debt due to medical expenses is a major reason why Americans fall into financial hardship. If you’re in this situation, you might not even be able to afford health insurance, with the result that your medical bills continue to mount. Filing for bankruptcy can alleviate your economic burdens and offer you a fresh start.

“Medical bankruptcy” is not a legal term but it generally means seeking relief from heavy medical debts under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. By discharging these debts, you will more likely be able to afford health insurance and thereby to bring your ongoing medical costs under control. Healthcare providers tend to charge uninsured patients substantially higher rates because insurance companies and providers often agree to reduced rates for specified services.

When you file for Chapter 7 bankruptcy, any medical debt can be included and potentially discharged. Since these types of bankruptcies are often concluded within 90 to 120 days, you may be able to become free of your medical and other debt relatively quickly. This can free up funds for use in paying for health insurance, which can be critical if you have put off necessary medical procedures due to a lack of coverage.

A Chapter 13 bankruptcy is your best option if your income is too high to satisfy the Chapter 7 “means test.” This is a type of court-supervised debt reorganization that calls for you to enter into a three-to-five-year repayment plan. You pay creditors a set amount every month — usually making up far less than the original debts — until the repayment plan period has concluded. Notably, a Chapter 13 plan can allow you to pay your health insurance premiums before paying other creditors. You might also be able to amend your repayment plan if your medical expenses have subsequently increased beyond the amount you had budgeted.

Your health should be your utmost priority. If you are experiencing overwhelming debt and have put off obtaining health insurance or seeking medical treatment as a result, an experienced bankruptcy attorney can help you pursue your available legal remedies.

Jeff Field & Associates assists clients with bankruptcy matters throughout the Atlanta metropolitan area. We have offices in Bogart, Douglasville, Gainesville, Lawrenceville, Marietta and Decatur. To schedule an appointment, call 404-381-1278 or contact us online.