How To File Bankruptcy on Medical Debt

Medical Debt Can Feel Overwhelming — but You Have Options

If you’re dealing with medical bills you can’t afford to pay, you’re not alone — and it’s not your fault. A sudden illness or unexpected emergency room visit can leave even the most financially responsible people buried in debt. In fact, medical debt is one of the most common reasons people file for bankruptcy in the United States.

The good news? There are real, legal tools that can help you get out from under the weight of medical debt. 

Bankruptcy is one of the most powerful. Filing for bankruptcy can stop debt collectors from calling, prevent lawsuits, and erase your medical bills completely. It’s not right for everyone, but for many people, it offers a true fresh start.

This guide will walk you through how bankruptcy works when it comes to medical debt and how to decide if it’s the right step for you. We'll also briefly cover other options, like negotiating your bills or applying for financial assistance, if bankruptcy isn’t a good fit for your situation.

Let’s start by answering the most important question: Can you really file bankruptcy for medical debt?

Can You File Bankruptcy on Medical Debt?

Yes, you can file bankruptcy on medical debt.

In fact, medical debt is one of the most common types of debt that gets erased through Chapter 7 bankruptcy. 

Whether your bills came from a surgery, an ER visit, a chronic condition, or something unexpected, they can usually be wiped out entirely through a bankruptcy filing. 

🏥 This includes debts owed directly to a hospital or doctor, as well as accounts that have already been sent to collections.

Here’s what filing bankruptcy can do for your medical debt:

• Erase the debt completely (if you qualify for Chapter 7)

• Stop collections and lawsuits immediately, thanks to the automatic stay

• Give you a fresh start, without having to negotiate each individual bill

Even better: There’s no such thing as “too much” or “too little” medical debt to file bankruptcy. If the bills are causing stress, harming your credit, or keeping you from moving forward, it’s worth exploring your options.

Chapter 7 vs Chapter 13 Bankruptcy: Which Is Better for Medical Debt?

When it comes to dealing with medical debt through bankruptcy, Chapter 7 is often the fastest and most affordable option — especially for people who qualify based on their income and financial situation.

Chapter 7 may be a good fit if you:

✅ Don’t have a high income or own many valuable assets

✅ Mainly have unsecured debts like medical bills or credit cards

✅ Want a clean slate without a long-term repayment plan

Chapter 13 is another form of bankruptcy that works differently. It sets up a 3–5 year repayment plan that may help if you have steady income and need to catch up on missed mortgage or car payments. This can be useful in certain situations, but it’s a longer and more complex process.

Since many people struggling with medical debt are a better fit for Chapter 7, this guide will focus primarily on that process, including what it is, how it works, and how to find out if you qualify.

If you aren’t sure which option is best for you, you can always speak with an attorney about your situation. Upsolve can connect you to a local attorney for a free consultation.

Do You Have To Have an Attorney To File Bankruptcy on Medical Debt?

You don’t legally have to have an attorney to file bankruptcy. Filing without a lawyer is called filing pro se. Many people successfully file on their own, without hiring an attorney every year.

If you have a simple Chapter 7 case, you may be eligible to use Upsolve’s free filing tool. If your case is complex or you simply want some legal assistance, we can also connect you with an attorney for a free consultation. You can use this consultation to get questions answered about your case and see if the attorney is a good fit.

If you aren’t sure whether bankruptcy or another debt-relief option is best for you, it can be a good idea to start with a free session with a nonprofit credit counselor. Cambridge Credit Counseling is a trusted Upsolve partner that provides free consults and guidance on your best debt relief options.

Cambridge is an affiliate partner, which means Upsolve may earn a small commission if you choose to use their paid service. This helps keep our services free.

Timing Matters: When Should You File Bankruptcy for Medical Debt?

There’s no perfect moment to file bankruptcy — but the timing of your filing can affect how much relief you get. If you’re struggling with medical debt, it’s worth thinking about when (and whether) to file based on your full financial picture.

Here are some important timing factors to consider:

• Are you expecting more medical bills or financial changes soon?

  • If you’re still receiving care, waiting on a diagnosis, or unsure how big the bills will get, it may be wise to hold off on filing until the full picture is clearer. Bankruptcy only wipes out debt you have at the time you file, and you can only file Chapter 7 once every eight years, so timing it right matters.

• Are you facing collections or lawsuits?

  • If you're facing a lawsuit or wage garnishment, filing bankruptcy sooner can help. It triggers an automatic stay. This legal protection immediately stops most collections, including lawsuits, garnishments, and collector calls.

• Have you recently used credit cards or made large payments?

  • If you’ve used credit cards for medical costs or living expenses recently — or paid back a friend or family member — those actions may raise red flags in your case. In some situations, waiting a few months before filing can help avoid complications.

To learn more about how timing can affect your financial situation, check out our filing guide.

What Are the Pros and Cons of Filing Bankruptcy on Medical Debt?

Filing Chapter 7 bankruptcy can be a powerful tool for dealing with medical debt, but it’s not the right fit for everyone. Here are some key benefits and drawbacks to keep in mind as you consider your options.

Pros

✅ Filing stops most collection efforts immediately. Once you file, debt collectors have to stop calling, suing, garnishing your wages, or sending threatening letters.

✅ It can erase medical debt completely. Most medical bills are considered unsecured debt, which means they can be wiped out entirely through Chapter 7.

✅ You may also get rid of other debts. In addition to medical bills, you can often erase credit card balances, payday loans, and other unsecured debts at the same time.

✅ The process is fast and affordable. Most Chapter 7 cases are resolved in about 4–6 months and cost less than other debt relief options, especially if you qualify for fee waivers.

✅ You get a fresh start. Many people feel immediate relief after filing and are able to start rebuilding their credit and finances sooner than expected.

Cons

❌ It affects your credit. A Chapter 7 filing stays on your credit report for up to 10 years. This can temporarily lower your score, especially if your credit is currently in good shape.

❌ You have to meet income requirements. Not everyone qualifies for Chapter 7. You’ll need to pass a means test to show you can’t afford to repay your debts.

❌ Some debts can’t be erased. Bankruptcy won’t get rid of child support, alimony, most student loans, or recent tax debts.

❌ You might lose non-exempt property. Most people keep everything they own, but if you have valuable assets that aren’t protected by exemptions, the trustee may be able to sell them to pay creditors.

❌ You can only file Chapter 7 once every eight years. That means timing matters. If you’re likely to take on more medical debt in the near future, it may be better to wait.

How To File Chapter 7 Bankruptcy for Medical Debt: Step-by-Step

If you’re feeling overwhelmed by medical bills, filing for Chapter 7 bankruptcy can be a powerful way to get a fresh start. And while the process might sound intimidating, it’s often simpler than people expect — especially if you qualify to file using Upsolve’s free tool.

Here’s what the process typically looks like, from start to finish:

1. Gather your financial info.

2. Take a credit counseling course.

3. Prepare and file your forms. The automatic stay goes into effect.

4. Attend your 341 meeting.

5. Take a second course.

6. Receive your bankruptcy discharge.

Step 1: Gather Financial Information

📃 Start by collecting the paperwork you’ll need for your case. This includes your medical bills, a list of your other debts, proof of income like recent pay stubs or benefit letters, and information about your property, expenses, and monthly budget. 

It’s also helpful to pull a credit report, which you can do for free at AnnualCreditReport.com. This can help you get debt account information and make sure you include all your creditors.

You don’t need to organize everything perfectly — just start pulling together what you have.

Step 2: Take the First Required Course

Before you can file, you’ll need to complete a short course from an approved credit counseling agency. It usually takes about an hour and can be done online or over the phone. You’ll get a certificate when you’re done, which you’ll include with your bankruptcy forms.

Step 3: Fill Out the Required Bankruptcy Forms & File With Your Local Court

You’ll fill out several official bankruptcy forms that tell the court what you own, what you owe, how much you make, and what you spend. Filing this paperwork with the court is what officially starts your bankruptcy case.

✨ If you qualify, Upsolve can help you complete these forms for free, with step-by-step guidance that’s designed for people who don’t have a lawyer. It only takes about two minutes to see if you’re eligible to use our free tool.

Once your forms are ready, you’ll file them with your local bankruptcy court. You’ll either pay the $338 court filing fee, apply to pay in installments, or request a fee waiver if you qualify.

🛑 As soon as you file, the court puts an automatic stay in place. This stops most debt collection right away, including calls, letters, lawsuits, and wage garnishments.

Step 4: Attend a Short Meeting With Your Trustee

About a month after you file, you’ll attend a short meeting with your bankruptcy trustee, called the 341 meeting of creditors. It’s usually 10 to 15 minutes long and happens by phone or video. The trustee will ask a few questions to confirm the info in your forms. Creditors can attend, but they rarely do.

Step 5: Take the Second Required Course

Before your case wraps up, you’ll need to take one more brief course — called debtor education or the financial management course. Like the first course, it’s online, takes about an hour, and you’ll submit a certificate to the court.

Step 6: Receive Your Bankruptcy Discharge

If all goes well, you’ll get a discharge notice in the mail within a few months. This is the court’s official order that wipes out your qualifying debts, including your medical bills, and gives you a fresh start.

Alternatives to Bankruptcy for Medical Debt Relief

Bankruptcy can be a powerful way to erase medical debt, but it’s not your only option. If you’re not ready to file or don’t qualify for Chapter 7, there are other ways to get relief. Here are some steps you can take to deal with medical bills outside of bankruptcy.

Negotiate With the Hospital or Provider

Start by contacting the billing office. Many hospitals and doctors are willing to reduce or forgive part of a bill, especially if you’re uninsured or facing financial hardship.

Before you reach out, it’s a good idea to make sure the charges are accurate by:

• Reviewing your medical bills for errors or duplicate charges

• Asking for an itemized statement

• Making sure your insurance paid everything it was supposed to

If you find inaccurate billing information, you can also dispute the charges. Unfortunately, this is pretty common.

Once you understand the charges, you can request:

• A discount or hardship reduction

• A settlement for less than the full amount

• A payment plan with affordable monthly installments

Many providers would rather work with you than send your bill to collections.

Ask About Financial Assistance or Charity Care

If your income is low or you’re experiencing hardship, you may qualify for hospital financial assistance programs. These are often required by law for nonprofit hospitals, and can reduce or even eliminate what you owe.

You can:

• Ask the hospital if they offer charity care or income-based relief

• Search for state or local programs that help cover medical expenses

• Contact nonprofit organizations that assist with healthcare bills

These programs may cover hospital charges, emergency room visits, and more, especially if they’re considered medically necessary.

Work With a Credit Counselor or Medical Billing Advocate

If you're overwhelmed or unsure where to start, consider reaching out to a nonprofit credit counselor or medical billing advocate. They can help you organize your finances and create a realistic plan to manage your debt. Sometimes they’ll even negotiate with providers on your behalf.

Set Up a Payment Plan or Explore Low-Interest Financing

If your provider doesn’t offer financial assistance, you may still be able to set up a long-term payment plan. Many providers offer interest-free or low-interest plans directly through their billing department.

Some people also consider using a medical credit card with an introductory 0% interest period or taking out a low-interest personal loan to consolidate medical bills.

⚠️ Be cautious with these credit-based options though. They may help in the short term, but could lead to more debt if not managed carefully.

Know if You're "Judgment Proof"

If you don’t have income or property that a creditor can legally take — and you don’t expect your financial situation to change — you may be what’s called judgment proof. That means even if a debt collector sues you and wins, they can’t collect the money.

This doesn’t erase your debt, but it may give you peace of mind. If you’re judgment proof, bankruptcy or debt settlement may not be necessary — especially if your only income comes from protected sources like Social Security or disability.