I have ongoing health issues and medical collections, can I keep filing bankruptcy?

Yes, and no.

Assuming that your income is below median, you can get a discharge in a chapter 7 every 8 years.  However, this doesn’t help a client who gets a discharge of $240,000 of medical debts today and then racks up a $40,000 emergency room bill six months down the road.  That new $40,000 er bill wasn’t covered in the chapter 7, and they cannot list in in a new chapter 7 for 7.5 years.

However, chapter 13s are designed to handle this.

If you have ongoing health issues, then you will want to file a “base plan” chapter 13, meaning that you’re proposing to pay the chapter 13 trustee payments of about $100 a month for 3 -5 years.  This still discharges all of your unsecured, nonpriority debt (like medical bills), even though you end up paying pennies on the dollar.  If you have a new medical bill in the middle of this chapter 13, you can simply stop paying and the case will be dismissed.  Then you can file a new 13 and include the new bill and start the $100 a month payments all over again.

Theoretically, you could file a 5 year chapter 13 plan every 5 years for the rest of your life.  You would be protected from collectors and would be paying pennies on the dollar for the medical bills related to your health issues.

I know that it doesn’t sound like fun at all, but you can use a chapter 13 to cover those medical bills and to be ready for any new ones that crop up.

Leave a Reply