Some people experiencing financial hardship are also facing medical uncertainty and wonder if future medical expenses will be discharged if they file for bankruptcy now. This is a great question because it is such an important issue. The answer is simple: Filing bankruptcy wipes out, or discharges, debt that you acquired PRIOR to the date you file bankruptcy. Any debt you acquire AFTER filing WILL NOT be wiped out in the current bankruptcy case.
Here’s an example to simplify the answer:
John had open heart surgery in May 2012. His medical expenses from that surgery exceed $60,000. John has been told he will need at least one more follow up surgery sometime within the next year and that the cost of the new surgery will be $25,000. John has no insurance.
If John files bankruptcy on January 1, 2013 all of his medical expenses that he acquired BEFORE January 1, 2013 will be wiped out or discharged in his bankruptcy. His surgery expense from May 2012 will be discharged. If he has his new surgery AFTER the date he files bankruptcy, that new debt WILL NOT be wiped out in his bankruptcy. He will have to wait 8 years before he can file bankruptcy on the new surgery expense.
John may want to wait until after he has had the second surgery to file bankruptcy so he can wipe out the expense of both surgeries in his current bankruptcy.
If you are facing financial stress and medical uncertainty, contact a bankruptcy professional to determine your options. If you live in the Upper Peninsula of Michigan, call me, Cathy Church (800) 758-5611 for a free consultation today.