If you find yourself drowning in medical bills without the money to clear the debt, you might be wondering if there’s such a thing as medical bankruptcy; a way to declare bankruptcy for medical bills exclusively. You wouldn’t be alone. In today’s world of soaring medical costs, drastically increased life expectancy, and decreasing availability of affordable health insurance, many end up stuck under a pile of debt after a medical catastrophe, chronic illness or disease.
While there’s no such thing as medical bankruptcy, approximately 85% of bankruptcy filers petition for a discharge of debt because of loss of income, divorce or medical issues. Outstanding and overwhelming medical bills are a very common reason to file for bankruptcy protection. To gain the bankruptcy protection for medical bills, you will need to petition the bankruptcy court for a discharge of ALL your debt. You cannot pick and choose which debts to include in your bankruptcy.
Your medical debts may very well be exacerbated by the fact that chronic illnesses and major medical procedures often leave an individual unable to hold a steady job and/or obtain steady income. This leads many to resort to credit cards as supplemental income in the place of their lost wages. So on top of their medical bills, many find themselves with quickly growing credit card balances.
In some cases, there’s also a limited income. In this situation, even if there is not a lot of other unsecured debt, medical bills can be enough to cripple what was once a healthy financial plan. There are alternatives to bankruptcy. For instance, you may be able to contact the hospital directly in order to request information on available hardship programs. Some offer hardship balance reductions, etc. Hospitals that are financially solvent are more open to working with patients on repayment plans with low monthly payments. In some cases, it could even be under $100/month with 0% interest until the account is paid off.
There are also non-profit organizations that help pay medical bills for those in need. In some areas, low-income individuals can gain assistance from such groups to cover their outstanding medical expenses. If you’re interested, research and see if there are any appropriate options in your area. If you can’t find information (as it isn’t prevalent) try contacting your local congressperson to inquire about this option.
Once your options are exhausted, contact a southern California bankruptcy expert. Westgate Law can help you navigate California bankruptcy law and help you obtain a discharge from your medical debt and any other debt that is crippling your finances.