Manage Bills Without Bankruptcy

• In many states, hospitals operate as nonprofit organizations. As part of their agreement with the state, they agree to provide charity care for people who fall under a certain income level for their family size. You can contact the hospital's billing department to see if you qualify. They may have an application process to determine your eligibility. You may also want to see if any discounts are available to you. The hospital may be very willing to discount the bill, particularly if you are looking at bankruptcy. They could be in the position of getting some money in a settlement, or no money if you file for bankruptcy.
  
  

Considering Bankruptcy

• If you don't think that your hospital bills are manageable, you are in good company. In 2007, Harvard researchers found that medical bills were a major factor in 62 percent of all bankruptcy filings. They also found that 78 percent of those filers had medical insurance. If you are not going to be able to pay off your hospital bills in three to five years, bankruptcy could be a viable option to deal with these bills.
  
  

Effects on Hospital Bills

• Unsecured debt is often fully dischargeable in a Chapter 7 bankruptcy, including hospital bills. They can also be included in repayment plans in a Chapter 13 bankruptcy. Basically, if you file for bankruptcy, you probably will emerge from it not owing anything on your hospital bill. Individual doctor's bills work the same way, however, doctors are likely to drop you as a patient if you file for bankruptcy and don't pay the bills for their services.
  
  

Other Considerations

• Do not file for bankruptcy too soon, particularly if you may incur more hospital debt. You will not be able to file a Chapter 7 again for eight years, so it is better to include all of this debt into one filing. You should not borrow money to pay off hospital bills. This is particularly true if you are borrowing against a home. You will not be able to discharge debt secured by property and also keep the property without paying off the debt. For the same reason, try to avoid withdrawing from or borrowing on a retirement plan to pay hospital bills. These assets are exempt in a bankruptcy.