For the vast majority of people, the main goal of filing for Chapter 7 bankruptcy is to discharge or “wipe out” their debts. Although some debts are considered or may be determined to be “nondischargeable,” most people filing for Chapter 7 will be able to discharge most if not all of their debts. A bankruptcy discharge releases the individual debtors from personal liability for the debt and prevents the creditor from taking any further collection action against the debtor. In other words, the debtor is no longer legally required to pay any debts that are discharged.
So which debts are dischargeable and to medical liens fall into that category? Although not all debts are dischargeable, the majority of your debts will be discharged through Chapter 7, especially if you do not have any extraordinary circumstances. Among your dischargeable debt, only your debts that arose before the date of filing for Chapter 7 will be discharged. You will still be responsible for any debt you incur after filing your petition. These debts are not subject to your discharge.
Below is a list of commonly discharged debts that include medical and hospital bills.
- credit card charges (including overdue and late fees)
- collection agency accounts
- medical bills
- personal loans from friends, family, and employers
- utility bills (past due amounts only)
- dishonored checks (unless based on fraud)
- student loans (only in a few rare circumstances, an generally only applicable to non-federally guaranteed student loans)
- repossession deficiency balances
- auto accident claims (except those involving drunk driving)
- business debts
- money owed under lease agreements (includes past due rent)
- civil court judgments (unless based on fraud)
- tax penalties and unpaid taxes due beyond a certain number of years
- attorney fees (except child support and alimony awards)
- revolving charge accounts (except extended payment charges)
- social security overpayment, and
- veterans assistance loans and overpayment.
Seeking the advice of a qualified bankruptcy attorney is always advisable when dealing with overwhelming debt.