Medical debt is a topic that causes some confusion among those looking at potentially filing bankruptcy. Many wonder: will Texas bankruptcy eliminate or reduce my medical debt? By how much? How much will I still have to pay? These questions, like many pertaining to bankruptcy, have both simple answers and complications; for starters, the type of bankruptcy you choose affects how your medical debt is handled prior to discharge.
Medical Debt is Fully Dischargeable
The good news first: medical debt is typically considered unsecured, nonpriority debt when it comes to categorizing for purposes of your Fort Worth bankruptcy. This means that the debt is completely dischargeable through Chapter 7 or Chapter 13 filing. So no matter how high the bills have gotten, all hope is not lost, and there may indeed be a bright light at the end of the tunnel.
In Chapter 7 liquidation, you may lose more of your assets but your unsecured debts will be totally cleared after the bankruptcy process has been completed, typically a matter of months. This is a great solution for those who cannot afford to make even minimal payments. Chapter 13, on the other hand, is used by those who make more than the maximum allowed under Chapter 7 or who wish to keep certain assets after the bankruptcy process. Under a Chapter 13 repayment plan, priority debts are paid first, and unsecured debts afterward. So depending on your case, you may have to pay a portion of your medical debt during the three to five year repayment period; still, at the end any remainder will be discharged.