First, I need to point out that a "medical bankruptcy" is not a correct bankruptcy term. While medical bills are often the root cause of a bankruptcy, it would still be either a Chapter 7, Chapter 11 or Chapter 13 bankruptcy petition that is actually filed with the Court....there is no separate chapter for medical bankruptcy.
However, the person calling my law firm isn't a bankruptcy lawyer, so I don't mind at all that they are inquiring about a medical bankruptcy. It is not the potential client's job to know what type of bankruptcy should be filed nor what it is called. That is my job and it is one that I enjoy.
Sometimes it is not even necessary for a person with only medical bills to file bankruptcy. One example of this scenario that I can think of is if a single person was renting an apartment and his or her only income was from social security. So long as the individual did not have any other non-exempt assets, he or she may not actually need to file a bankruptcy. The simple reason is that the individual does not have anything that a creditor can take. Sure, the hospital or doctor may file a lawsuit to try to collect on the medical bill and the hospital or doctor will almost certainly win this lawsuit. However, when the medical care provider attempts to collect on the judgment they will find that the individual is not subject to garnishment and does not have any personal property that may be seized to satisfy the judgment. As I have said before and will say again....you cannot get blood from a turnip.
However, simply because one does not have any property to lose does not mean that the person will not decide to file a bankruptcy. Even a person who does not have any property to lose may be required to show up at a court proceeding from time to time in the event that the medical providers filed lawsuits. These are fairly routine hearings called proceedings supplementals and I would typically advise a client who has no income subject to garnishment and no personal property above the exemptions that there is nothing to be nervous about. For some people the thought of showing up at court is intensely terrible. I have had a few clients in the past where I was actually nervous about them going to court because they were so nervous about it and so stressed that I feared they may suffer from a heart attack, stroke or some other severe health issue as a result of the stress. Therefore, even though a person may not need to file a bankruptcy to protect any income or assets, he or she may opt to do so to stop collections calls and court proceedings.
The bottom line is that if you have mounting medical bills that you cannot pay bankruptcy may be a useful tool. The should be determined by you meeting with a qualified bankruptcy attorney in your area. As always, if you live in Indianapolis or the surrounding areas and would like to meet to determine whether bankruptcy is a good option for you call my office at 317-575-8222. Evening and weekend appointments are available.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.