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File Medical Bankruptcy

February 10, 2011 | Comments: 0 | Views: 94

The term medical bankruptcy relates to the reason why an individual or married couple files a Chapter 7 or Chapter 13 bankruptcy - that is, to either eliminate or reorganize overwhelming owed medical debts. Medical debt in most instances includes doctor, dentist and hospital bills. It can also include debts owed to medical laboratories, ambulance services and health insurance companies.

Medical bills are an increasingly growing reason of why Americans file bankruptcy. A Harvard University study in 2005 stated that medical bankruptcies accounted for fifty-five percent of all bankruptcies filed. The trend of filing medical bankruptcies has increased in the subsequent years since due to the nation's economic woes, even though over 75% of all current bankruptcy filers are covered by some form of health insurance.

Chapter 7 and Chapter 13 bankruptcies deal with medical debt in two very different ways. Medical debts are classified as "unsecured debt" - that is, there's no collateral like a house or car that is attached to the debt and that can be repossessed if the debt goes unpaid. Credit cards, utility bills and payday loans are also unsecured debts.

Chapter 7, sometimes referred to a "complete bankruptcy", is designed to fully eliminate all unsecured debt, including one's medical and hospital bills. Individuals and married couples have to qualify for Chapter 7 based on their income & expenses, and can only file a Chapter 7 bankruptcy once every eight years.

Chapter 13 is designed to help a person or married couples repay their medical and other unsecured debt over a sixty-month period. Commonly referred to as the "reorganization bankruptcy", Chapter 13 is created and formed around the filer's subjective financial circumstances. Depending on one's assets, income & expenses, it's possible to pay back as little as zero to ten percent of one's owed medical and unsecured debts.

If you have unsurmountable medical bills and are considering filing for medical bankruptcy visit Bankruptcy HQ to receive your Free Evaluation with a local bankruptcy attorney.

Source: EzineArticles
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