Discharging Medical Bills in Bankruptcy
For South Florida residents, medical debt is a significant problem. People at any age can accrue medical debt due to insurance issues or a medical emergency, and as we age, we tend to require more medical care for which costs can quickly add up. According to the Florida Department of Elder Affairs, the population of older adults in the state aged 60 and up represents a majority of the population, and a large percentage of those seniors live at or below the federal poverty level. Given the high number of older adults in need of medical care, and the median income and growing cost of living, Floridians are struggling to pay for health care. If you are among this widening group, you might be considering bankruptcy.
It is important for you to know that it is usually possible to discharge medical bills in bankruptcy, and medical debt is one of the most commonly cited reasons for bankruptcy filings. Our bankruptcy lawyers in West Palm Beach can tell you more.
Hundreds of Millions Struggling with Health Care Debt
Floridians with seemingly insurmountable health care debt certainly are not alone. According to a report from the Kaiser Family Foundation, approximately 100 million people in the United States had medical debt as of spring 2022. To put that figure another way, more than 40 percent of adults in the US were dealing with debt from health care services, and about 25 percent of everyone with medical debt owes more than $5,000. For about 20 percent of Americans with medical debt, they report that the amount is too high for them to “expect to ever pay it off.”
As of spring 2022, approximately 17 percent of those with medical debt filed for bankruptcy in order to manage. While others have reported that they have changed their living situations or attempted to cut costs in other areas, more people could be filing bankruptcy to discharge medical debt in the future, including older adults in South Florida.
Medical Debt is Typically Dischargeable
You might be wondering if medical debt is a type of debt that is considered dischargeable. In short, medical debt is typically dischargeable. While the US Bankruptcy Code outlines a variety of types of debt that are categorized as “exceptions to discharge” (such as family support debt and certain types of tax debt), neither medical debt nor any type of health care-related debts are listed.
When your medical debt can be discharged—and the amount that can be discharged—will depend on the type of bankruptcy you file for (usually either Chapter 7 or Chapter 13 for individuals), and other aspects of your specific financial circumstances. In a Chapter 7 case, all medical debt can usually be discharged within four to six months of filing. In a Chapter 13 case, the amount discharged will depend on the details of your repayment plan, and remaining eligible debts will be discharged once the terms of the plan have been completed (usually three to five years).
Contact Our West Palm Beach Bankruptcy Lawyers Today
Do you need help discharging medical debt in a bankruptcy case? An experienced West Palm Beach bankruptcy lawyer at Kelley, Fulton, Kaplan & Eller can begin working with you today.
Sources:
law.cornell.edu/uscode/text/11
elderaffairs.org/wp-content/uploads/2021_Florida-Profile.pdf
kffhealthnews.org/news/article/diagnosis-debt-investigation-100-million-americans-hidden-medical-debt/
