Medical debt is a leading cause of Florida bankruptcy, but oftentimes the manner in which medical debt is treated in Chapter 13 can be confusing to those thinking about filing. The fact is that medical debt can be discharged in Chapter 13 bankruptcy repayment plans, as it is not a secured debt. However, you must fulfill the terms of the Chapter 13 arrangement in order to receive the discharge.
Discharge of Medical Debt
The amount of medical debt that you will have to repay in Florida bankruptcy depends on a number of factors, mainly your level of disposable income and the amount of your secured debts to be repaid. At the end of the repayment period, all remaining unsecured debts will be fully discharged, including the remainder of your medical debt. There are a couple of factors to consider before choosing Chapter 13 repayment, though.
First, Chapter 13 repayment follows a strict timeline for the repayment of those debts able to be paid in bankruptcy. This period stretches from three to five years, depending on the case. During that period, all payments must be made on time or the bankruptcy is nullified and the discharge will not occur. This can be tough, especially on those with continued medical issues as they may begin to accumulate new medical debt that is not covered in the Chapter 13 repayment plan, thereby rendering them unable to repay and losing the protections offered in bankruptcy.
Second, if your earnings are lessened due to a medical condition, this will affect your ability to make the payments required under the Chapter 13 plan. If you miss payments, your Chapter 13 case will not come to completion and you will remain liable for all debts.