How To File Bankruptcy on Medical Debt and Get Relief
Medical debt can be completely eliminated through Chapter 7 bankruptcy, stopping collections immediately and giving you a fresh start. If you can't afford your medical bills and qualify based on income, bankruptcy may be your fastest path to relief. Alternatives like negotiating with providers or applying for charity care exist, but bankruptcy offers the most comprehensive solution for overwhelming medical debt.
Qualify for Chapter 7Medical bills can bury you fast. A single ER visit or unexpected surgery creates thousands in debt. You’re not alone in this struggle. Medical debt drives more bankruptcy filings than almost any other cause in America.
You have real options for relief. Bankruptcy can stop collectors, prevent lawsuits, and erase your medical bills completely. It’s not right for everyone, but it offers a genuine fresh start for thousands each year.
Eliminate Your Medical Debt Through Chapter 7
Medical bills crushing your finances? You may qualify for Chapter 7 bankruptcy and eliminate them completely in just 4-6 months. Get a free attorney consultation to see if you qualify and start your fresh start today.
Check Your EligibilityThis guide shows you exactly how bankruptcy works for medical debt. You’ll learn who qualifies, what to expect, and how to decide if filing makes sense. We’ll also cover alternatives like negotiating bills or applying for financial assistance.
Can You File Bankruptcy on Medical Debt?
Yes. Medical debt gets erased through bankruptcy every single day.
Chapter 7 bankruptcy eliminates medical bills as unsecured debt. Hospital bills, doctor charges, ER visits, surgery costs—all can be wiped out entirely. This includes debts you owe directly to providers and accounts already sent to collections.
Filing bankruptcy gives you these benefits for medical debt:
- Eliminates the debt completely if you qualify for Chapter 7
- Stops collections and lawsuits immediately through automatic stay protection
- Provides a fresh start without negotiating each individual bill
No minimum or maximum debt amount exists. If medical bills stress you out, damage your credit, or prevent you from moving forward, bankruptcy deserves consideration.
Chapter 7 vs Chapter 13: Which Works Better for Medical Debt?
Chapter 7 typically works best for medical debt. It’s faster and more affordable than Chapter 13, especially for people with limited income and few assets.
Chapter 7 fits you well if you:
- Have low income or few valuable assets
- Owe mainly unsecured debts like medical bills or credit cards
- Want a clean slate without a 3-5 year repayment plan
Chapter 13 sets up a multi-year repayment plan. It helps if you have steady income and need to catch up on mortgage or car payments. The process takes longer and involves more complexity.
Most people with overwhelming medical debt qualify better for Chapter 7. This guide focuses on that process.
Do You Need an Attorney to File Bankruptcy on Medical Debt?
No law requires you to hire an attorney. Many people file successfully on their own each year. This approach is called filing pro se.
If you’re unsure whether bankruptcy or another option works best, start with a free consultation. Speak with a bankruptcy attorney for free to explore your best debt relief options and determine if Chapter 7 makes sense for your situation.
Timing Matters: When Should You File Bankruptcy?
No perfect moment exists, but timing affects your relief. Consider these factors before filing:
Are You Expecting More Medical Bills Soon?
If you’re still receiving treatment or awaiting diagnosis, wait until the full picture emerges. Bankruptcy only erases debt you have when you file. You can only file Chapter 7 once every eight years, so timing matters significantly.
Are Collectors or Lawsuits Threatening You?
File sooner if you face lawsuits or wage garnishment. Bankruptcy triggers an automatic stay that immediately stops most collections, including lawsuits, garnishments, and collector calls.
Have You Recently Used Credit Cards or Made Large Payments?
Recent credit card use for medical costs or payments to friends or family can raise red flags. Waiting a few months before filing helps avoid complications.
Check out our filing guide to learn more about timing considerations.
Pros and Cons of Filing Bankruptcy on Medical Debt
Chapter 7 bankruptcy offers powerful relief but isn’t right for everyone. Consider these factors carefully.
Benefits of Filing
- Collections stop immediately. Debt collectors must stop calling, suing, garnishing wages, or sending threatening letters once you file.
- Medical debt gets erased completely. Most medical bills qualify as unsecured debt and can be eliminated entirely through Chapter 7.
- Other debts disappear too. Credit card balances, payday loans, and other unsecured debts often get erased simultaneously.
- The process moves fast. Most Chapter 7 cases resolve in 4-6 months and cost less than other debt relief options, especially with fee waivers.
- You get a fresh start. Many people feel immediate relief and start rebuilding credit faster than expected.
Drawbacks to Consider
- Your credit takes a hit. Chapter 7 stays on your credit report for up to 10 years. Your score drops temporarily, especially if your credit is currently good.
- Income requirements apply. You must pass a means test showing you can’t afford to repay debts.
- Some debts survive. Child support, alimony, most student loans, and recent tax debts don’t get erased.
- You might lose non-exempt property. Most people keep everything, but valuable unprotected assets could be sold to pay creditors.
- You can only file once every eight years. Timing becomes crucial if more medical debt seems likely soon.
How To File Chapter 7 Bankruptcy: Step by Step
Filing Chapter 7 bankruptcy can give you a fresh start. The process is often simpler than people expect. Here’s what to expect from start to finish:
- Gather your financial information
- Take a credit counseling course
- Prepare and file your forms
- Attend your 341 meeting
- Complete debtor education course
- Receive your bankruptcy discharge
Step 1: Gather Financial Information
Collect the paperwork you’ll need for your case. Gather medical bills, other debts, recent pay stubs or benefit letters, and information about your property, expenses, and monthly budget.
Pull a free credit report at AnnualCreditReport.com. This helps you get debt account information and include all your creditors in your paperwork.
You don’t need perfect organization. Just start pulling together what you have.
Step 2: Take the First Required Course
Complete a short credit counseling course from an approved agency before filing. The course takes about an hour and can be done online or by phone. You’ll receive a certificate to include with your bankruptcy forms.
Step 3: Fill Out and File Required Bankruptcy Forms
Complete several official bankruptcy forms detailing what you own, owe, earn, and spend. Filing this paperwork officially starts your bankruptcy case.
Submit your forms to your local bankruptcy court. Pay the $338 court filing fee, apply for installment payments, or request a fee waiver if you qualify.
The court puts an automatic stay in place immediately upon filing. This stops most debt collection right away, including calls, letters, lawsuits, and wage garnishments.
Step 4: Attend a Short Meeting With Your Trustee
About a month after filing, you’ll attend a brief meeting with your bankruptcy trustee. The 341 meeting of creditors usually lasts 10-15 minutes by phone or video. The trustee asks questions to confirm your form information. Creditors can attend but rarely do.
Step 5: Take the Second Required Course
Complete one more brief course before your case wraps up. The financial management course takes about an hour online. Submit your certificate of completion to the court.
Step 6: Receive Your Bankruptcy Discharge
You’ll receive a discharge notice in the mail within a few months if everything goes well. This official court order eliminates your qualifying debts, including medical bills, and gives you a fresh start.
Alternatives to Bankruptcy for Medical Debt Relief
Bankruptcy isn’t your only option. If you’re not ready to file or don’t qualify for Chapter 7, other paths exist for relief.
Negotiate With the Hospital or Provider
Contact the billing office directly. Many hospitals and doctors reduce or forgive part of a bill, especially for uninsured patients or those facing hardship.
Before reaching out, verify charges are accurate:
- Review medical bills for errors or duplicate charges
- Request an itemized statement
- Confirm your insurance paid everything properly
If you find billing errors, dispute the charges. Billing mistakes happen frequently.
Once you understand the charges, request:
- A discount or hardship reduction
- A settlement for less than the full amount
- A payment plan with affordable monthly installments
Most providers prefer working with you over sending bills to collections.
Ask About Financial Assistance or Charity Care
You may qualify for hospital financial assistance programs if your income is low or you’re experiencing hardship. Nonprofit hospitals often must offer these programs by law. They can reduce or eliminate what you owe.
Take these steps:
- Ask the hospital about charity care or income-based relief
- Search for state or local programs covering medical expenses
- Contact nonprofit organizations assisting with healthcare bills
These programs may cover hospital charges, ER visits, and other medically necessary care.
Work With a Credit Counselor or Medical Billing Advocate
Consider reaching out to a nonprofit credit counselor or medical billing advocate if you feel overwhelmed. They help organize your finances and create realistic debt management plans. Some negotiate with providers on your behalf.
For medical debt specifically, speak with a bankruptcy attorney for free to understand all your options and find the best path forward.
Set Up a Payment Plan or Explore Low-Interest Financing
You may still set up a long-term payment plan if your provider doesn’t offer financial assistance. Many providers offer interest-free or low-interest plans through their billing department.
Some people consider using a medical credit card with an introductory 0% interest period or taking out a low-interest personal loan to consolidate medical bills.
Be cautious with credit-based options. They may help short-term but could create more debt if not managed carefully.
Know if You’re Judgment-Proof
You may be judgment-proof if you don’t have income or property creditors can legally take. Even if a debt collector sues and wins, they can’t collect any money.
This doesn’t erase your debt but may give you peace of mind. If you’re judgment-proof, bankruptcy or debt settlement may not be necessary. Protected income sources include Social Security or disability benefits.