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    I would like to share the amazing experience I have had with this Law firm. I was on the verge of loosing my house because I had not paid my property taxes. I looked for a Bankruptcy at Read More
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    When I say this office was absolutely the best, I am not kidding! They have been absolutely phenomenal. Robert has been the best bankruptcy attorney. The whole team has always kept Read More
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  • Paula D.starstarstarstarstar5.0
    I was referred by a friend to this bankruptcy attorney. Mr. Stiberman and his staff was very courteous, knowledgeable and very caring towards my concerns. I am pleased with the outcom Read More
    April 18, 2023logo
  • Paul B.starstarstarstarstar5.0
    I would like to share the amazing experience I have had with this Law firm. I was on the verge of loosing my house because I had not paid my property taxes. I looked for a Bankruptcy at Read More
    July 10, 2023logo
  • S.M.starstarstarstarstar5.0
    When I say this office was absolutely the best, I am not kidding! They have been absolutely phenomenal. Robert has been the best bankruptcy attorney. The whole team has always kept Read More
    April 20, 2023logo
  • Paula D.starstarstarstarstar5.0
    I was referred by a friend to this bankruptcy attorney. Mr. Stiberman and his staff was very courteous, knowledgeable and very caring towards my concerns. I am pleased with the outcom Read More
    April 18, 2023logo
  • R.P.starstarstarstarstar5.0
    The process was relatively easy, I would recommend Stiberman Law to anyone who finds themselves in need of a bankruptcy attorney.
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  • Jose N.starstarstarstarstar5.0
    I have to say that I have had a great experience with Stiberman Law regarding a bankruptcy and they have been very informative and supportive. They have been very helpful and always ans Read More
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  • L.L.starstarstarstarstar5.0
    Excellent service. Great bankruptcy attorney and staff. Always informed me of what to expect. My Chapter 13 bankruptcy was smooth and the process was easy thanks to Robert and the Read More
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  • Sam Sstarstarstarstarstar5.0
    Twelve years ago I was in need of legal representation stemming from the housing meltdown if 2008. Robert Stiberman and his staff handled the matter with complete professionalism and sp Read More
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  • K.D.starstarstarstarstar5.0
    I was looking for a bankruptcy attorney in Miami, and I found Mr. Stiberman. He and his office were efficient, and they guided me through every step of the process. I am appreciative of Read More
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  • Carmen C.starstarstarstarstar5.0
    I am so grateful for Stiberman Law, P.A. In 2019 my husband and were faced with a very difficult decision file for Bankruptcy, unfortunately we weren’t able to pay for our credit Read More
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  • N.M.starstarstarstarstar5.0
    Excellent work from this bankruptcy law firm! I was drowning in debt with my license suspended from a lawsuit I had and thought I would have to spend the rest of my life paying back deb Read More
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  • R.Z.starstarstarstarstar5.0
    The experience with this office has been great. No problems at all they have kept me straight to doing the right thing and feeling a breeze of peace and being debt free with my bankruptcy.
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  • F.starstarstarstarstar5.0
    Very happy with Robert and his team. Thanks to them we were able to save our home. Very helpful and knowledgeable in bankruptcy. Best attorney.
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  • E.R.starstarstarstarstar5.0
    I had a great experience, I just want thank Stiberman law and his team for a great experience also Ana for the help and explaining my case. Appreciate, thank you
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  • A.B.starstarstarstarstar5.0
    Very good office with my bankruptcy. They have been amazing through this hard process. Very happy with Robert and his staff they are very nice and professional. Thank you stiberman!
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  • W.J.starstarstarstarstar5.0
    Amazing work by Robert. They are really good with what they do, very attentive and knowledgeable. Customer service and professionalism are top, the lawyer has been great this whole t Read More
    June 25, 2022logo

Can You File Bankruptcy on Medical Bills?

When you have medical bills that are piling up, it can feel overwhelming and never-ending. This is why many people look to see if they can file bankruptcy for medical bills. Since medical bills are almost always considered an unsecured debt, they can be included in a bankruptcy filing.

According to the American Medical Association, 62% of all bankruptcies are attributed to medical bills. The AMA also found that 92% of those who filed for bankruptcy had more than $5,000 in medical bills. With statistics like these, it’s important to know where your medical bills stand if you are considering filing for bankruptcy. 

Bankruptcy for Medical Bills

If you’re thinking about filing bankruptcy for medical bills, you may be wondering does bankruptcy clear all debt?

Since medical bills are usually considered an unsecured debt because the borrower does not provide any collateral for the loan, they can usually be discharged during bankruptcy. When the debt is discharged, the borrower is released from any personal liability on the debt. The creditor is also prohibited from taking any action to collect the debt. 

While “medical bankruptcies” don’t exist, the type of bankruptcy you file will determine what if any money you need to repay.

Chapter 7 Bankruptcy and Medical Bills

If you decide to file for Chapter 7 bankruptcy, you likely will not have to pay any of the medical bills that you owe. Under Chapter 7 bankruptcy, the debtor does not make any payments to their creditors. Non-exempt assets may be liquidated to pay back the debts.

When assets are exempt, the borrower will not have to sell the asset as a condition of bankruptcy. Many times people file Chapter 7 bankruptcy and don’t lose any assets at all. 

While Chapter 7 can discharge medical debts, it may not be for everyone. Here are some things to remember about Chapter 7 bankruptcy:

  • To file for Chapter 7 bankruptcy, your income must be below your state’s median for a household of your size. A presumption of abuse arises if your income is above your state’s median, but you can overcome the presumption of abuse in the event you pass the second portion of the means test.
  • Some of your property may be liquidated to pay off creditors.
  • The process can take up to six months. Once the bankruptcy is final, your debts can be discharged.
  • Chapter 7 bankruptcy stays on your credit report for 10 years.

If those terms sound agreeable, then Chapter 7 bankruptcy may be right for you. If not, you may want to consider filing Chapter 13 bankruptcy for medical bills and other debts.

Chapter 13 Bankruptcy and Medical Bills

If you decide to file for Chapter 13 bankruptcy, there will be a payment plan to repay your debts. The plan will detail how the borrower’s income will be used to pay medical bills. All bills, including medical bills, will be combined, and paid based on the debtor’s disposable income. This will likely be less than what is actually owed. The difference is forgiven with unsecured debt. If the amount is less than what is actually owed, the difference will be discharged.

Under Chapter 13 bankruptcy, each creditor will receive a pro-rated portion of what they’re owed. This includes medical bills. 

Here are some other things to keep in mind about Chapter 13 bankruptcy:

  • Debt cannot exceed certain levels.
  • You must have a steady income to repay your loans.
  • Chapter 13 takes longer and can stretch out over years, not months, due to the repayment plan.

Although all medical debt may not be completely forgiven under Chapter 13 bankruptcy, paying less than what was originally owed is often better for some people.

Final Thoughts

When medical bills are mounting and you are having trouble paying them and other debts, you may want to consider filing for bankruptcy. Your personal circumstances will determine whether Chapter 7 or Chapter 13 bankruptcy is best for you. Consulting a bankruptcy attorney can help you determine which path to take.

Do You Need a Bankruptcy Attorney?

If you have medical bills that are mounting and are considering filing for bankruptcy, let our 13 years of experience in bankruptcy law guide you in the process. Call us today at  (954) 922-2283 to schedule a free consultation with a Florida bankruptcy attorney.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More

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