Medical Bankruptcy in Indianapolis

April 24, 2015

Bankruptcy Attorneys frequently are confronted with requests for a Medical Bankruptcy in Indianapolis.   A “Medical Bankruptcy” is a term that many perspective bankruptcy clients use in order to describe a bankruptcy that only (or mostly) addresses large, burdensome medical debts.   When you file a “medical bankruptcy,”  you are filing n regular, Chapter 7 bankruptcy but with the goal of discharging all of your medical debts.

 Are All Medical Debts Dischargeable in a Medical Bankruptcy?

Generally, all medical debts are dischargeable in bankruptcy because they are regular, “unsecured” debts.   Medical debts come when you are unable to pay a certain amount or the entirety of the medical debt amount that resulted from illness or injury.  These are termed as “unsecured debts” because there is no property (such as a house or a car) that can be taken back under contract as a result of not paying the medical debts.  However, be careful.  Medical debt creditors CAN still file lawsuits.  These lawsuits allow medical creditors to seek garnishments and seize money from your bank account if they go far enough into the legal process.   Medical debts are just as important to address as personal loans, credit cards, or any other form of debt.    You need to seek a “medical bankruptcy” (as our clients call them) to discharge your medical debts in bankruptcy.

 Medical Debts are protected by the “Necessity” Doctrine

When you file a “medical bankruptcy” in Indiana, you are allowed usually to discharge ANY form of medical debt even if the procedure or care that created the medical bill happened right before you needed to file for bankruptcy.  This is because medical treatment is treated as a life “necessity” which is highly protected and cannot be subject (generally/usually) to a fraud or luxury-purchase-type analysis.  Essentially, you needed to get your medical (sometimes also dental) procedure done and your entitlement to discharge medical debts in bankruptcy CANNOT be taken away.

 Bankruptcy For Medical Debts: The “Necessity” Doctrine Can Backfire in Indiana

The “Necessity” doctrine can backfire if you file a “medical” bankruptcy in Indiana.   Due to the “Necessity” doctrine for Medical treatment (that you absolutely must have medical treatment in most cases and you do not have a choice), your SPOUSE can be held liable for YOUR medical bills.

Therefore, if you file a bankruptcy for medical debts in the Greater Indianapolis area, your spouse may also need to file for bankruptcy just to be safe EVEN IF SHE HAS NO OTHER FORM OF DEBTS.   This is because it may be possible for your creditors to assert Indiana Law and collect against a spouse for medical debts even after that spouse has filed bankruptcy.   Remember, your spouse can be held liable for your medical debts in Indiana in many situations.

 Medical Debt Bankruptcy: The Unfortunate Conclusion

As medical costs soar throughout the United States, many families find themselves in impossible debt situations due to no or insufficient medical insurance coverage.    We have seen several Indiana families that had FULL medical insurance polices, but still had to file medical debt bankruptcy because of the vast amount of non-covered items and deductibles that come with medical insurance these days.   Do not let medical debts give you impossible burdens to carry or destroy your credit.  Contact our office and we will discuss how bankruptcy and other alternatives can help you eliminate your medical debt.

Bankruptcy Attorney John Bymaster – Bymaster Bankruptcy Law Offices

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