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Can you discharge medical debt?

On Behalf of | Oct 7, 2022 | Bankruptcy

If you declare bankruptcy, there are two major categories that a lot of your debt will fit into. First, you have priority debt. Examples of this are things like student loans – at least, in most cases – child support payments, or back payments that you owe for taxes.

With priority debts, you typically cannot discharge them in bankruptcy. There are some situations in which student loans can be discharged, but it is not common. Things like child support certainly have to be paid, even by someone who is going through bankruptcy. Back taxes need to be paid unless you reach an agreement with the IRS. 

Non-priority debt

The second category includes non-priority debts. These are things that can be forgiven in bankruptcy. Examples of this include credit card debt and medical debt. Many of these are unsecured debts. This means there isn’t an asset that can be reclaimed. Money that you owe for medical care that you already received falls into this category. 

In fact, what you’ll find is that medical debt is listed in the majority of bankruptcy cases. It may not be the only debt that the person has or even the full reason that they’re filing for bankruptcy. But, in roughly two out of three cases, it is listed as a reason that that individual is deciding to use bankruptcy. 

This just shows how common it is and how much of a detrimental impact overwhelming medical debt can have on your financial position. If you are facing this type of debt, take the time to look into all of the options that you have. Using bankruptcy may allow you to secure a more positive financial future for yourself.


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