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Medical Debt with Billing Statement with Clipboard

Medical Debt and Bankruptcy

Pytte Law June 20, 2022

In 2021, there were 4,096 total filings and closings of bankruptcy cases in the Middle District of Georgia, according to the United States Bankruptcy Court. Many people found relief from their financial troubles in bankruptcy court. Bankruptcy offers individuals the chance to start fresh by either discharging their debt or restructuring it in a way that makes payments more manageable. 

Some people choose bankruptcy as a means of solving the financial problems created by their medical debt. Medical debt is a major financial burden that makes life more difficult for many Americans. An unexpected medical emergency can mean a financial disaster, causing repercussions that last for years.

I know how medical debt can grow to affect all parts of your life. At my firm, Pytte Law, I am dedicated to helping my clients find the best solution and path forward from their financial problems. I serve clients in Savannah and Hinesville, Georgia, and in Statesboro, Richmond Hill, Ludowici, Chatham County, Liberty County, and the nearby counties as well. 

Will Bankruptcy Discharge Medical Debt?

Bankruptcy can be used to discharge medical debt in Georgia. It is important to know that even if you only need to file for bankruptcy to discharge your medical debt, filing bankruptcy may affect all of your finances. The exception is student loans, which can almost never be discharged by bankruptcy. Speak with an experienced bankruptcy attorney to learn more about how medical debt and bankruptcy can affect your financial situation. 

Which Chapters Can Help With Medical Debt?

The different chapters of bankruptcy serve different purposes. Here’s what you need to know about both Chapter 7 bankruptcy and Chapter 13 bankruptcy for medical debt.

Chapter 7 Bankruptcy for Medical Debt

If you are looking to discharge only your medical debt, a Chapter 7 bankruptcy may be the best option for you. You can file Chapter 7 bankruptcy on one single debt such as medical debt. 

Chapter 7 provides immediate relief from debt collectors and automatically stops most creditors from calling you. It only takes about 90-120 days to receive relief after filing Chapter 7 bankruptcy. Filing Chapter 7 bankruptcy can be a good option for those who don’t earn much or have assets with little to no equity.

It’s important to know the consequences of filing Chapter 7 bankruptcy for medical debt or for other types of debt. Filing for Chapter 7 can negatively impact your credit score for up to 10 years, and it may make it more difficult to get medical treatment. However, Chapter 7 bankruptcy will eliminate your debt and can temporarily stop eviction and foreclosure processes.  

Chapter 13 Bankruptcy for Medical Debt

Chapter 13 bankruptcy is another option for those seeking to manage their medical debt. If you have a regular source of income, or if your medical condition is not preventing you from fully earning, Chapter 13 may be your best solution.  

With Chapter 13 bankruptcy for medical debt, you will pay back part of your medical debt, essentially as much as you can afford, over a three-to-five-year repayment period. Chapter 13 bankruptcy will not impact your credit score for as long as Chapter 7 bankruptcy does, and it is less likely that you will lose your assets with a Chapter 13 bankruptcy filing. 

Chapter 7 and Chapter 13 bankruptcy are helpful options for many people with medical debt. Deciding whether filing for bankruptcy for medical debt is right for you will depend on both your debt and your income.

Let an Experienced Bankruptcy Attorney Help

Knowing which chapter of bankruptcy to file can be complicated. At Pytte Law, I use my knowledge of medical debt and bankruptcy law to help you seek a fresh start in your financial life. Pytte Law is proud to represent clients in Savannah and Hinesville, Georgia, as well as Statesboro, Richmond Hill, Ludowici, Chatham County, Liberty County, and the nearby counties. Contact my firm today to schedule a free consultation.