Drowning In Debt from Medical Bills?

According to a Harvard University study, an estimated 2 million Americans are affected by medical caused bankruptcies each year.

Often times, I have found in my bankruptcy practice that unpaid medical bills make up a large portion of an individual’s debt portfolio. Insurance just does not cover all the medical expenses being incurred by Americans today. It is even the case that a person’s income is above the median income level so that they do not automatically satisfy the Chapter 7 presumption of abuse valuation. However, if you look at their medical expenses, there is no way that they can afford medical bills plus pay the necessary expenses of food, clothing and shelter. Generally, in a Chapter 7 bankruptcy, medical bills will be discharged with most other unsecured debt. If a Chapter 13 bankruptcy is filed then all unsecured debts will be reorganized, and a percentage may be paid out based upon available income.

If a client is not going to use the benefit of a bankruptcy filing then a financial services attorney can negotiate the debt in a number of ways: If the doctor still holds the medical claim then a payment arrangement can be negotiated. If a debt collector has the file then the collector can be negotiated with, or a settlement for a percentage of the debt value can be offered.

Each bankruptcy case is taken on a case by case basis, and it could be that a Chapter 7 bankruptcy filing is still available if it is proven that the medical expenses are extraordinary above the median allowed on the means test.