Medical Debt and the Means Test
Ongoing medical expenses count as deductions on the means test, helping you qualify even if gross income is above the median. Unreimbursed expenses, premiums, and treatment costs all reduce your income calculation.
Medical Debt as Unsecured Debt
Medical bills are general unsecured debt. In Chapter 7, unsecured debt is discharged completely. No minimum or maximum. The discharge injunction permanently bars collection.
Special Circumstances
Courts recognize medical debt is involuntary. This can support a special circumstances argument on the means test (11 U.S.C. 707(b)(2)(B)).
Frequently Asked Questions
What percentage of bankruptcies involve medical debt?
Studies show medical expenses contribute to approximately 60-66% of all personal bankruptcies. Even insured people face catastrophic bills from deductibles and out-of-network charges.
Will I lose my assets?
Most Chapter 7 filers keep everything due to exemptions. The vast majority of cases are no-asset cases.
Can I file while still receiving treatment?
Yes. Filing does not affect your right to care. But bills incurred after filing are not included in the discharge.
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