What Medical Bills Can You Get Rid of With Bankruptcy?

 Posted on February 29, 2024 in Medical Debt

Filing for bankruptcy can provide much-needed relief if you are overwhelmed by medical debt. Under Texas bankruptcy law, most types of medical debt can potentially be discharged through bankruptcy. However, you will want to understand which medical bills may still remain your responsibility after bankruptcy. A Texas lawyer can help you determine how different medical debts may be treated during bankruptcy.

Medical Debt from Doctors, Clinics, and Hospitals

Most medical debt owed directly to healthcare providers like hospitals, doctors’ offices, and medical clinics is unsecured under Texas law. Unsecured medical debts for treatment you have already received can usually be discharged entirely through Chapter 7 or Chapter 13 bankruptcy. This includes bills from:

• Emergency room visits
• Hospital stays
• Doctor office visits
• Outpatient procedures
• Diagnostic tests like X-rays or bloodwork

So, if you owe money directly to a doctor or healthcare facility, those medical debts can likely be eliminated through bankruptcy. Just be aware that any medical services you receive after filing for bankruptcy will remain your responsibility to pay in full.

Medical Debt Owed to Lenders or Collection Agencies

Sometimes, medical debt gets turned over to collections agencies or finance companies after a period of nonpayment. These third-party lenders often purchase old medical debt for pennies on the dollar. The good news is that in most cases, medical debts that have gone to collections can also be discharged in bankruptcy, provided certain conditions are met.

The main requirement is that the medical debt must be unsecured. Suppose the collections agency or lender does not have a lien on any of your property. In that case, the debt can still be eligible for discharge under Chapter 7 or Chapter 13 bankruptcy.

Exceptions for Secured Medical Debts

One important exception relates to secured medical debts. Sometimes, doctors’ offices or healthcare facilities allow patients to finance expensive medical equipment like wheelchairs or hospital beds over time. They may put a lien or security interest on the equipment itself. These purchase money security interests usually cannot be discharged through bankruptcy. After filing, you would still be responsible for paying off the remaining balance if you wish to keep the equipment.

Personal injury settlements that provide future payment for medical care also generally cannot be discharged through bankruptcy. If you file an accident or malpractice claim related to medical bills, then bankruptcy will usually not remove obligations to pay medical creditors out of funds you receive through the case in the future.

Contact a Schertz, TX Bankruptcy Lawyer

Texas bankruptcy law does allow the elimination of most types of unsecured medical debt, providing much-needed relief to those facing financial crises due to medical issues. However, secured debts may remain, so speak to a qualified Texas bankruptcy attorney to understand how your medical bills might be treated in bankruptcy court before filing. This can provide more predictability over what debts will remain your responsibility on the other side of bankruptcy. You can determine the next steps with proper advice from a San Antonio, TX bankruptcy attorney. Call Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.