Bankruptcy is a sensitive issue for many Americans because it is often caused by serious situations that are beyond the control of most responsible people. This can include the financial damage wrought by a divorce, a failed business, a natural disaster, or illness, injury or disease. In fact, many bankruptcies are caused by medical bills alone. Even seemingly simple health problems can quickly spin out of control as treatment costs skyrocket: some estimates place the average weekly cost of a hospital stay at $10,000. However, this is exactly why bankruptcy protection was developed- to help people recover and start over from what would otherwise be insurmountable debts.

If medical bills are the single largest contributing factor causing you to consider bankruptcy, you should give thought to some other options first. Most doctors’ offices, clinics, hospitals, outpatient centers and other healthcare providers are exceptionally willing to work with people who cannot afford to pay all or part of their medical bills. Many have programs available that allow clients to pay according to their income level, while others will reduce the total balance owed or even waive the balance completely in some cases. So before you pay a retainer fee for a bankruptcy attorney you should consider making arrangements with your medical creditors directly.

If you determine that bankruptcy is the best course of action to remedy exorbitant medical bills you should gain an understanding of how Chapter 7 bankruptcy works. This is also referred to as liquidation bankruptcy, where non-exempt assets and property is sold by the court to distribute among creditors, and the filer’s debts are (with some exceptions) completely and forever dissolved. Medical bills are very easy to have included and dissolved via Chapter 7 bankruptcy. However, there are certain requirements that must be met in order to qualify.

The primary requirement to eliminate your medical bills via bankruptcy is an inability to pay any debts that are not considered basic living expenses. Essentially, you will be asked to provide documentation and other evidence substantiating that your financial situation does not allow you to pay your debts; including medical bills. The information you provide will be used as part of a means test to determine your disposable income level. Any amount above $182.50 per month will disqualify you for Chapter 7, although you may still be eligible for Chapter 13 reorganization.

The amount of your medical bills has very little bearing on how your bankruptcy proceedings will ultimately play out. People with as little as a few thousand and as much as millions of dollars in medical bills have been able to get all such debts discharged in a Chapter 7 bankruptcy. However, this might not be the best option for everyone, so it’s always best to consult with a professional bankruptcy attorney in order to learn more. Use your State Bar Association website or visit the American Bankruptcy Institute to find listings of bankruptcy attorneys in your area, including listings of attorneys that provide free initial consultations.