People that come to see me here at my Houston law office about debt problems often seem surprised that hospital and medical bills can be discharged in bankruptcy. These kinds of debts are "general unsecured" debts and are typically discharged without payment in chapter 7, or paid whatever amount the general unsecured class is being paid in a chapter 13 case, which is often little or nothing.
Keep in mind that if you are ordered to reimburse an ex-spouse for medical bills through a divorce decree or other order of a family court, you may have to pay this kind of debt, or be held in contempt of court. Medical bills in such a case could be held to be "in the nature of child support," and not discharged by bankruptcy. 11 U.S.C. Sec. 523(a)(5).
And also, if you have a particular doctor that you are seeing and want to continue to see, even though you file bankruptcy on his bill, he can refuse to treat you unless you pay it or agree to make payments on it. If you file bankruptcy, you must list all of your debts so in such a situation you may want to contact the doctor's office and let them know that you will be paying it. You can voluntarily pay any debt that you want after a bankruptcy discharge. 11 U.S.C. Sec. 524(f).
Timing can also be important in medical bankruptcies. If you have a major surgery or procedure coming up, you may want to wait until after it is over, to be sure that you can include the bills from the event. Once the bankruptcy is filed, it may not be possible to include after-acquired debt in the bankruptcy.
Should medical bills be discharged in bankruptcy? Should people be allowed to discharge or cancel their doctor and hospital bills in bankruptcy? Please share your comments below.