Does Bankruptcy Clear Medical Debt and Credit Card Debt?
- Sheereen E. McNair, Esq.
- 1 hour ago
- 2 min read
Yes. Medical bills and credit card balances are both unsecured debts, and bankruptcy typically wipes them out completely in Chapter 7 or reduces them in a Chapter 13 plan. These are two of the most common debts we discharge for our clients.
If medical bills or credit cards are the reason you are considering bankruptcy, you are in very common company. Here is what filing does to those debts.
Why these debts are dischargeable
Medical bills and credit cards are unsecured, meaning no property like a house or car is tied to them. Unsecured debts are exactly what bankruptcy is designed to clear.
What Chapter 7 does
In Chapter 7, qualifying medical and credit card debt is discharged completely, usually within a few months. You do not pay it back, and the collection calls stop.
What Chapter 13 does
In Chapter 13, these debts are folded into your repayment plan. Many clients repay only a portion of their unsecured debt over the plan, and the remaining balance is discharged at the end.
What bankruptcy does not clear
Some debts generally survive bankruptcy, such as most recent taxes, child support and alimony, and most student loans. We will tell you clearly which of your debts will be wiped out and which will not.
The calls stop right away
As soon as your case is filed, the automatic stay stops collection calls, letters, and lawsuits on these debts. For many people that relief is immediate.
How we help
At Middleton Legal we review every debt you have and show you exactly what filing would clear. We help clients in Maryland and Florida. For a free consultation, call 240-896-3253.
This article is general information and not legal advice. For advice about your situation, speak with a licensed attorney.
Comments