Medical Debt and Bankruptcy
Contrary to what many people believe there is not an actual “medical bankruptcy”. Medical debt is however one of the most common reasons that people file Chapter 7 or Chapter 13 bankruptcy in Washington. But, a person filing bankruptcy for medical debt is treated the same as if the debt was non medical debt, such as credit card, or other debt.
I see clients will all sorts of medical debt. Some debts are owed directly to hospitals. Others are owed to local doctors, or clinics. These debts may be due to anything from emergency room visits to expenses related to the birth of a child.
Generally, if a medical bill isn’t paid, the medical provider will not try to collect the debt for more than a few months. It is typical that if they are not being paid in the first few months of billing they will sell your medical debt to a collection agency. Or, they may hire a collection agency to collect the medical debt on their behalf.
Fortunately if you are drowning in medical debt, or collections from medical debt bankruptcy will help. Medical debt is a fully dischargeable debt in a bankruptcy case. This means that if you file for bankruptcy protection, your medical debt will be erased. Once you file either chapter 7, or chapter 13 the medical creditors and/or collection must immediately cease collecting on the debt.
If you are overwhelmed by medical debt it may be a good idea to discuss your situation with an experienced bankruptcy attorney. If bankruptcy appears to be a good option the attorney can let you know how you can move forward. You also may be able to retain the attorney before you actually file and let your creditors know that you are working with an attorney and have them call the attorney to get your phone to stop ringing so much. Once an attorney is retained, debt collectors must only communicate with your attorney.
