Sometimes life happens, and after a debtor files bankruptcy they get injured and run up medical bills. Can they add those bills to their bankruptcy filing?
This is a good question, and the answer is that it would depend on what kind of bankruptcy is filed. There are two commonly filed bankruptcies, Chapter 7 and Chapter 13. A Chapter 7 bankruptcy is usually the quickest and easiest form of bankruptcy. A Chapter 13, also called the wage earners plan, lets a debtor with a regular paycheck create a repayment plan to get rid of part of or all of their debts during a three to five year period.
In the case of a Chapter 7 bankruptcy, if medical care was provided before the debtor filed, those debts are considered to be a part of the bankruptcy process. In that case, they would be discharged. On the other hand, if the medical care was rendered after a Chapter 7 bankruptcy is filed, that debt is not a part of the proceeding. This means the debtor would have to pay the bill on their own.
No one can predict when they are going to be hurt and need to go to the hospital or need on-going medical care. Unexpected bills happen to everyone from time to time. This means you need to move forward with caution when filing. After you have filed a Chapter 7, you must wait eight years before filing another Chapter 7. If you are unable to or do not want to pay medical creditors, they have the option to pursue filing a lawsuit against you. If they are successful, they may be able to foreclose on your property, attach liens, garnish wages or seize assets.
In a Chapter 13 bankruptcy, your disposal income is a part of the process of bankruptcy, and it is used to make monthly payments in accordance with the repayment plan you submitted to the courts. In other words, it is an ongoing plan, and that means you may amend the schedule as you move forward to include medical debts. They are prioritized and added in to the order of payments. Any unpaid, unsecured debt, such as medical bills may be discharged.
Even though it is possible to add medical debt repayment to a Chapter 13, there are other consequences. The biggest one is the added expense you face to try and meet your debt repayment plan. If you are unable to pay, or miss payments, the plan may be dismissed. This would put you right back where you started from in the first place.
There are exceptions to be considered in either instance, and it is wise to contact a qualified Iowa bankruptcy lawyer and find out what options are open to you in your particular case.