I have to incur more medical debt soon. Should I file for bankruptcy now or wait?
If you know you'll be adding more medical debt to your other debts, it might make sense to delay filing for bankruptcy. This is because the bankruptcy discharge only wipes out the debts you owe as of your filing date. In addition, bankruptcy law limits how often you may receive a discharge in bankruptcy.
If you delay your filing until after you incur the additional medical debt, you can include that debt in your bankruptcy. Read on to learn more about how delaying your bankruptcy can help you discharge all of your medical debt.
The answer depends on your previous bankruptcy and whether you intend to file for Chapter 7 or Chapter 13 bankruptcy. If you previously received a discharge in a Chapter 7 case, you need to wait eight years from the date of your previous filing before you can file for another Chapter 7 and get a discharge. If you intend to file for Chapter 13, you need to wait four years if you want a discharge. You are allowed to file a Chapter 13 before then to reorganize and pay your debts, but you will not be entitled to a discharge.
If you previously received a Chapter 13 discharge, then you need to wait six years from the date you filed your Chapter 13 before you can file a Chapter 7 unless you paid 100% of your unsecured debts in your prior Chapter 13 or at least 70% and the court finds that was your best effort. To receive another Chapter 13 discharge, you only need to wait two years before filing again. For the rules above, keep in mind that the effective date is the date you filed each bankruptcy, not the date of your discharge.
This means that if you file for bankruptcy, and then incur more medical debt, you won't be able to discharge the new medical debt for some time.
(For details, see Multiple Bankruptcy Filings: When Can You File Again?)
When you file for bankruptcy, you are required to list all debts you owe as of your filing date. However, debts incurred after your filing date are not part of your bankruptcy. As a result, if you incur more medical bills after filing your case, they will not be discharged in your bankruptcy.
If you are continuing to receive medical treatment and incurring more bills, consider waiting until your treatment is completed before filing for bankruptcy. Otherwise, you can be stuck paying medical bills you could have easily discharged in your bankruptcy. Since you are only allowed a limited number of bankruptcy discharges, it makes sense to time your bankruptcy so that you receive the most benefit.