Medical bills can quickly spiral out of control, leading to overwhelming debt that feels impossible to escape. In such a situation, many individuals begin to wonder: Can you file bankruptcy for medical bills? The short answer is yes. Bankruptcy can provide a legal avenue for individuals burdened by medical debts to get a fresh financial start. However, filing bankruptcy for medical bills is not a simple fix—it comes with important considerations, both in terms of legal requirements and costs.

In this article, we’ll explore how medical bills can factor into bankruptcy, the process of filing bankruptcy in SC, and what you need to know about the costs involved.

Understanding Bankruptcy and Medical Bills

Bankruptcy is a legal process that helps individuals and businesses eliminate or repay their debts under the protection of the bankruptcy court. There are two primary types of bankruptcy filings for individuals: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy: Also known as liquidation bankruptcy, this type of filing allows individuals to eliminate most of their unsecured debts, including medical bills. However, to qualify for Chapter 7, you must pass the means test, which evaluates your income, expenses, and family size to determine whether you qualify for a debt discharge.

Chapter 13 Bankruptcy: This is a reorganization bankruptcy where individuals create a repayment plan to pay off their debts over three to five years. While you won’t be able to discharge all of your debts, Chapter 13 can still provide relief by consolidating medical bills into one manageable payment.

Can You File Bankruptcy for Medical Bills in South Carolina?

The simple answer is yes—medical debts can be discharged in both Chapter 7 and Chapter 13 bankruptcies. However, there are specific rules and considerations when it comes to medical bills in South Carolina.

Medical Bills and Bankruptcy in South Carolina: South Carolina follows federal bankruptcy laws, which means that medical bills are treated as unsecured debts. Unsecured debts are those that are not tied to any collateral (such as credit cards, personal loans, and medical bills). In both Chapter 7 and Chapter 13 filings, medical bills fall under this category and can be discharged or restructured.

In Chapter 7, if you qualify, medical debts can be completely wiped out. In Chapter 13, while medical bills may not be entirely discharged, they can be included in your repayment plan and potentially reduced or restructured to fit within your budget.

The Impact of Medical Bills on Your Bankruptcy Case: If medical debt is the primary reason you are considering bankruptcy, it's essential to be honest about your situation. For example, if your medical bills are large due to an emergency surgery, accident, or chronic illness, this could significantly impact the success of your bankruptcy filing. Courts will typically allow medical bills to be discharged if they are verifiable and not incurred as a result of fraud.

What Does it Cost to File Bankruptcy for Medical Bills?

One of the most common questions individuals ask when contemplating bankruptcy is, What does it cost to file bankruptcy? Filing for bankruptcy comes with various fees, but understanding the costs upfront can help you prepare financially.

Filing Fees: Regardless of the type of bankruptcy, there are standard filing fees that you’ll need to pay to the court. As of 2023, the filing fees for Chapter 7 and Chapter 13 bankruptcy are as follows:

• Chapter 7: $338

• Chapter 13: $313

These fees are paid directly to the court, and they are non-refundable. It’s important to note that these fees don’t cover any additional costs such as attorney fees or credit counseling fees.

Attorney Fees: While it’s possible to file for bankruptcy on your own (also known as filing pro se), most individuals hire an attorney to navigate the complexities of bankruptcy law. An experienced bankruptcy attorney will help you assess your situation, prepare your petition, and represent you in court.

Attorney fees vary depending on the complexity of the case and the location, but for a straightforward Chapter 7 bankruptcy in South Carolina, you can expect to pay between $1,000 and $2,500 for attorney representation. For Chapter 13, the cost may range from $2,500 to $6,000, depending on the scope of the repayment plan.

Credit Counseling Fees: Before filing for bankruptcy, you must complete a credit counseling course with an approved agency. This course is designed to help you understand your financial options and prepare for bankruptcy. The fee for this course typically ranges from $20 to $50, depending on the provider.

Additional Costs: There could be other costs involved in the bankruptcy process, such as fees for obtaining credit reports, bankruptcy courses, or other necessary documentation. These additional costs typically range between $100 and $300.

Filing Bankruptcy in SC: What’s the Process?

Filing bankruptcy in South Carolina follows the same general process as filing in other states. Below are the key steps you’ll need to follow:

Consultation with an Attorney: The first step is to consult with a bankruptcy attorney. They will evaluate your financial situation, discuss whether bankruptcy is the best option, and help you choose between Chapter 7 or Chapter 13. You’ll also need to gather documents, such as tax returns, pay stubs, medical bills, and a list of all debts.

Credit Counseling: Before filing, you must complete a credit counseling course from an approved provider. This course typically lasts 60 to 90 minutes and will provide you with information about alternatives to bankruptcy.

Filing the Petition: Once you’ve completed the necessary steps, your attorney will file your bankruptcy petition with the court. This petition will include all the required forms, schedules, and documentation, including a list of your medical debts. Upon filing, an automatic stay goes into effect, preventing creditors from attempting to collect on the debt.

Meeting of Creditors: After filing, a meeting of creditors (also known as a 341 meeting) will be scheduled. This is an opportunity for the trustee and creditors to ask you questions about your finances and the debts you owe.

Discharge of Medical Bills: If you’re filing under Chapter 7, most of your unsecured debts, including medical bills, will be discharged after the meeting of creditors. If you’re filing under Chapter 13, you will begin making payments according to your repayment plan, and medical bills will be included in that plan.

Is Bankruptcy the Right Choice for You?

While filing bankruptcy for medical bills can provide much-needed relief, it’s important to weigh all options before making a decision. Bankruptcy should be considered as a last resort, as it can have long-term effects on your credit score and financial future. If you’re struggling with medical debt, consulting with a bankruptcy attorney in South Carolina is a good first step toward understanding your options and finding the best solution for your situation.

In conclusion, filing bankruptcy for medical bills is a viable option for those struggling to manage large medical debts. Understanding the costs, the process, and your options can help you make an informed decision. If you’re overwhelmed by medical bills and considering bankruptcy, consult with a qualified attorney to determine the best course of action for your financial future.