Ok, so we know that Dick Cheney had oodles of money to pay for the recent heart transplant that he received; however, let’s just assume that a fictional Richard Chainie had the exact same procedure performed and his health insurance failed to cover the average $997,000 hospital bill. Mr. Chainie makes $65,000 per year driving a UPS truck. There is no possible way he could ever repay this amount of debt, unless of course he received a miraculous million dollar inheritance from his Great Aunt Gertrude or somehow won the $300 Million Powerball.
Medical Debt is Dischargeable in Bankruptcy
Fortunately, life is not an over-the-top Jude Law movie, so there is no risk that the hospital is going to come back and repossess Mr. Chainie’s newly engorged heart. The underlying medical bill is an unsecured debt and can absolutely, unequivocally be wiped out by filing bankruptcy. One of the most common misconceptions I hear regarding bankruptcy is that medical debts are nondischargeable in bankruptcy. I do not know how this falsity took root, but it causes thousands of debtors to fail to seek the protection bankruptcy can offer. The fact is, all medical debts are dischargeable in bankruptcy, no matter how large the bill. Even a $2 million dollar medical bill will be wiped out by filing a Chapter 7 bankruptcy. If you were to file a Chapter 13, you would contribute as much to the debt as your disposable income would allow for a period of 3-5 years. After your payments are completed, the remaining debt would be completely discharged. After that, the hospital can never contact you again in an attempt to collect on the medical debt pursuant to the discharge injunction that takes effect after the close of your bankruptcy case.