The term "Medical Bankruptcy" is not a term found in the world of finance. However, in the world of bankruptcy a bankruptcy occurring due to medical problems is sometimes called a "Medical Bankruptcy". Several recent study's have shown a link between medical debts and bankruptcy.
Having overwhelming medical debt is a leading factor that leads to people needing to file a bankruptcy in Utah. In the majority of cases I see this arises from the failure of the debtor to have medical insurance. Even if you have medical coverage it is possible to run up huge medical debts your insurance company does not fully pay or the associated costs of prescription drugs and other ongoing medical help.
So Can I File Bankruptcy For My Medical Bills?
Yes. There are two types of bankruptcy that can help people eliminate or reduce their medical debts, a Chapter 7 bankruptcy and a Chapter 13 bankruptcy.
A Chapter 7 bankruptcy can only be filed once every 8 years. Because of this I urge my clients to obtain medical insurance before filing a Chapter 7 bankruptcy, if they do not already have coverage already. As an example, you could file a Chapter 7 bankruptcy and wipe out $50,000 in medical debt, but then have to go into the hospital the next day due to an unexpected car accident and run up another $100,000 in medical debt. At this point, you would not be able to file another Chapter 7 bankruptcy for 8 more years to eliminate that debt. So it is always wise to look into obtaining medical insurance that can help you in the future eliminate the major cause of filing for bankruptcy in Utah
Medical debts are unsecured debts, so there's no collateral available, which the creditors can repossess. However, the medical debt can be tied to collateral, and the insurance company may be able to garnish your wages, or claim a part of equity in a home.
The Law Office of Douglas Barrett, LLC has helped hundreds of clients over the years deal with medical bankruptcy. May times the medical debts are the crippling debt that pushes a family into bankruptcy.
We offer a Free Consultation to families dealing with overwhelming medical debts. Call us today if you are in a financial crises due to overwhelming medical debts. 801-221-9911.
Disclaimer: The information contained on this page is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the issues related to the area of consumer bankruptcy. Every individual's factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding specific information.