Many parents are drowning in medical debt due to the expense of a child who has a chronic childhood illness or disease, and often these parents feel like there is nowhere to turn for help with this debt. Children who suffer from these illnesses also face mounting medical debt once they turn 18 years old if not before this age, making it very difficult to protect their credit rating or to become an adult without staggering amounts of medical debt.
Parents who have children with serious and chronic childhood illnesses or diseases do have options, and there may be help available to help you deal with medical debt. A child who ends up needing to have a limb amputated due to a disease or traumatic injury may face medical costs which can be $40,000 or more for this single procedure, and even with insurance the parent could end up being responsible for 90% of this debt due to shortcomings in most insurance plan coverages and high deductibles. When the parent is trying to take care of a sick or injured child with all of the other related expenses then this medical debt may be the proverbial straw that breaks the camel’s back.
Some children who have high medical debt from a serious illness or chronic childhood disease may file for bankruptcy before they are even old enough to qualify for a license to drive a car, and this may be necessary to eliminate a large amount of medical debt for the child and parents. Bankruptcy may be an option to handle all medical debt that has been incurred. Chapter 7 normally discharges all of this unsecured debt and offers a fresh financial start without this debt hanging over you, as long as you pass the Means Test and list all of the medical debt in the bankruptcy petition that is filed.
Chapter 13 bankruptcy may also help you manage medical debt caused by a chronic childhood disease or illness. This form of bankruptcy does not involve a Means Test, and you will need to make payments on the medical debts for the specified time that the bankruptcy court has given. This type of bankruptcy involves a reasonable payment plan that is submitted to the court, and your finances are overseen by the court during the repayment plan period. All income, expenses, and debts are listed and then the court determines what you need to pay off your monthly bills and expenses. Any additional income is used for the payment plan, and your medical bills are paid down some.
After the specified repayment time period, which normally ranges from 3-5 years, the bankruptcy court will evaluate your case again. Usually any remaining debts that can be discharged are eliminated at this time. You make the reasonable payments over the life of the bankruptcy case, and any excess amounts are wiped clean by the bankruptcy court as long as the debt is legally eligible for discharge.
If you or your child have excessive medical debt then there is help available. The state where you live may have medical programs that could cover some or all of the bills incurred. In many cases you may not qualify for these programs because of your income or financial status though, yet the income requirements that are in place are very small and many who need help can not qualify for medical bill assistance through state sponsored programs. Bankruptcy can help you and your child start fresh financially, without large amounts of medical debt hanging over your head.