We’ve written a series of blog posts answering common questions regarding medical bill bankruptcy in Wisconsin. Call (262) 827-0375

Should I File for Bankruptcy if I Have Medical Debts?

Many Americans have unpaid medical bills. That’s the conclusion reached in several studies, one of which comes from the online loan marketplace LendingTree. It revealed an estimated 1 in 4 Americans have medical debt. It further pointed out that millennials account for 30% of Americans with medical debt, with 24% of Gen Xers, 22% of Gen Zers, and 13% of baby boomers right behind them. As of the writing of this article, Americans collectively owe around $195 million in medical bills. The reason for that debt varies from being uninsured or underinsured to being unemployed or under-employed and just plain bad luck, such as having claims denied by a health insurance provider, being required to pay out of pocket for non-formulary prescription drugs, and high specialist copays. Under the crushing weight of high medical bills, many Americans consider and often go through with filing for bankruptcy, which, in turn, ruins their credit.

How Much Do Americans Owe in Unpaid Medical Bills?

According to a study published by the Kaiser Family Foundation, a non-profit organization focused on national health issues, of the roughly $195 million Americans collectively owe in medical debt, an estimated 6% owe at least $1,000, and around 1% owe approximately $10,000. The foundation further revealed more than half of all adults in America are in debt because of medical and, in some instances, dental bills within the last five years. While medical bills ranging from $1,000 to $10,000 might not seem like much for well-off households, it can be a tall order for the ones that are not. Historically, those not-so-well-off households are often the first to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy to resolve outstanding medical bills.

Studies Show Many Americans Are Filing Bankruptcy To Escape Outstanding Medical Bills

Sadly, many Americans file for Chapter 7 or Chapter 13 bankruptcy when their medical bills become more than they can handle. That’s according to the Consumer Financial Protection Bureau. It found that nearly 66% of all personal bankruptcies filed in the U.S. are due to unpaid medical bills. While filing bankruptcy does get creditors off one’s back, it can negatively affect one’s credit for ten years. The same applies to unpaid medical bills, which can negatively affect their credit for up to seven years. While we are on the topic, the Consumer Financial Protection Bureau revealed roughly 43 million Americans currently have unpaid medical bills on their credit. Having a Chapter 13 or the more commonly filed Chapter 7 bankruptcy, along with unpaid bills, on one’s credit can make it harder to rent an apartment or buy a home. The same applies to buying a car and, in some cases, getting a job.

Should You File Bankruptcy if You Have Outstanding Medical Bills?

According to Rishi Manchanda, a physician, author, and healthcare leader who has spent more than ten years developing strategies to improve health in resource-poor communities, the U.S. has a healthcare system almost perfectly designed to create debt. And few can argue with that assertion. After all, close to 66% of all bankruptcies filed in U.S. courts are related to unpaid medical bills. That said, when someone does not pay their outstanding medical bills, creditors are within their rights to take them to court and have a judgment filed against them. If that happens, a court can enforce any of the following to collect payment from that individual:

• A bank levy
• A real estate lien
• Wage garnishment

Filing bankruptcy can prevent creditors and even courts from trying to collect unpaid medical bills. However, it comes at the cost of ruined credit. For some people, it’s just not worth it. Fortunately, there are other options, some of which include

Negotiating a Settlement With Medical or Debt Creditors

Most hospitals, clinics, dental offices, and other healthcare providers would prefer to negotiate a settlement to resolve unpaid medical bills than to go through the trouble of securing a court judgment. This option often allows individuals to settle their debt for a fraction of what they owe without ruining their credit.

Taking Advantage of Assistance Programs

Another option for dealing with unpaid medical bills without one’s credit taking a hit is to take advantage of assistance programs, especially when it comes to unpaid hospital bills. Examples of these programs include the following:

• Affordable Care Act (ACA)
• Children’s Health Insurance Program (CHIP)
• Consolidated Omnibus Budget Reconciliation Act (COBRA)
• Medicaid
• Medicare
• The Hospital Care Assurance Program (HCAP)

It is important to note that most of these assistance programs have eligibility requirements. Therefore, it’s best to contact the assistance program you’re interested in to confirm you meet their specific eligibility requirements.

When Filing for Bankruptcy Is the Only Option Left

Although it is far from ideal, filing for bankruptcy is a viable way to resolve unpaid medical bills if you’ve already tried other options that don’t involve destroying your credit, like assistance programs and negotiating with creditors. Bearing that in mind, individuals who file for bankruptcy in Milwaukee Wisconsin, much like other parts of the country, have two options to consider when using this legal remedy to resolve their outstanding medical bills: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Low-income households and those with assets that have very little or no equity might want to consider filing Chapter 7 bankruptcy to take care of unpaid medical bills. Chapter 7 bankruptcy allows a court to discharge your outstanding debt, effectively giving you a clean slate. Most people choose this option when a creditor threatens to garnish their wages, put a levy on their bank account, or have a lien placed on their home.

Chapter 13 Bankruptcy

Generally speaking, high-income households and those with assets with substantial equity do not qualify for Chapter 7 bankruptcy. However, they usually qualify for Chapter 13 bankruptcy, which doesn’t necessarily wipe out their debt. Instead, it allows individuals to pay all or part of what they owe via a repayment plan. Most repayment plans allow debtors 3 to 5 years to resolve their outstanding debt.

In summary, there are several ways to resolve medical debt that doesn’t involve filing for bankruptcy. However, if those options are unavailable or have already been exhausted, bankruptcy, Chapter 13 or Chapter 7, is a last resort worth considering.


Don’t look now but the cost of medical care in the United States continues to rise and there is no clear relief in sight – certainly not in 2023 – as companies, organizations and individuals navigate through an unstable economy. That’s according to the current Mercer’s National Survey of Employer-Sponsored Health Plans.

The survey reported by Businesswire and the Society for Human Resource Management found that employers in the U.S. can expect medical plans per employee to rise 5.6 percent on average in 2023. The cost-increase forecast is based on the first 864 employers with 50 or more employees responding through August 4.

Many, many people struggle with paying their medical bills. The rising costs of healthcare and patients’ inability to cover themselves and their families with sufficient health insurance has driven people to search for ways that they can be free of their medical debts.

Which brings us to the question: Can filing for bankruptcy help you wipe out debt from your medical bills here in Wisconsin? The answer is a resounding YES! Under Chapter 7 bankruptcy in the Badger State medical debt can be completely cleared.

Under Chapter 7 bankruptcy there are four classifications of debt. These include:

  • Secured debts
  • Unsecured debts
  • Priority debts
  • Nonpriority unsecured debts

Medical debts fall under the last category, nonpriority unsecured debts. Further, there is no cap on how much of your debt can be erased if you file for Chapter 7 bankruptcy. Once you relieve medical debt through Chapter 7 you relieve all of it. If you are overwhelmed by your medical bills and need a fresh start, declaring medical bankruptcy will stop creditors from pursuing you for medical debt repayment.

Chapter 13 bankruptcy treats unsecured debts like medical debt differently than Chapter 7. Although unsecured debts will still be wiped away at the end of your plan, it’s usually necessary to repay a small percentage of these debts during your plan depending on how much disposable income you have and the amount your unsecured creditors would have received if you had filed for Chapter 7 bankruptcy.

Before you file for bankruptcy to rid yourself of medical debt under Chapter 7 or under Chapter 13, there are several things you need to understand:

  • Costs – In Wisconsin in 2022 it costs $335 to file for Chapter 7 bankruptcy and $310 to file for Chapter 13 bankruptcy
  • Filing Without a Lawyer (Pro Se) – This is not a good idea. You will need expert counseling to guide you through the filing process. An attorney can help you qualify for Chapter 7 even when you thought you couldn’t. You’ll want legal representation when you meet with creditors and, by law, only a licensed attorney can provide this service. Filing for Chapter 7 improperly may force you to file for Chapter 13 and pay off a percentage of your unsecured debts. It may also force you to lose assets you didn’t know how to protect. You will need help filling out the forms and paperwork. Finally, if you miss a deadline it could mean delays or even dismissal of your case.
  • Bankruptcy and Your Credit Report – Bankruptcy, even when due to medical bills, hurts your credit score. It can stay on your credit history report between 7 and 10 years depending on which type of bankruptcy you choose.
  • Lending Risk – Filing for bankruptcy typically also increases your lending risk in the eyes of lenders. This will make it harder for you to get financing for big purchases including homes and car loans.

No matter which avenue you choose, filing for bankruptcy will be a very stressful, frustrating and exhausting period in your life. There will be an overwhelming amount of information you will need to understand before you decide to file. This is where you will need assistance from an experienced professional bankruptcy attorney to help you sort things out, guide you through the filing process and restore your financial peace of mind.

For more information about bankruptcy and how we can help you, call Milwaukee Bankruptcy attorney Michael Burr and the experts at the Burr Law office at (262) 827-0375 or visit www.burrlawoffice.com.

Medical Debt During a Pandemic

For many Americans, COVID-19 has been a perfect financial storm. Lockdowns have cost income and opportunity, and some who had been climbing out of the hole financially have had to rely on credit to get them through as the federal government has been unable to reach an accord on extending benefits. At the end of the year, a moratorium on foreclosures and evictions concludes, even as political uncertainty clouds the prospects of economic recovery. Other suspensions of debt payment, including student loan payments, are also coming to a close.

For Americans struggling with medical debt, health issues, and often depression, exacerbated by isolation and deferral of scheduled health maintenance during the pandemic, this combination of factors has added up to the perfect storm. If you’re one of those who has had to be hospitalized for treatment for COVID-19, its impact on your financial well-being may have been almost as severe as on your health. According to statistics, the median hospital stay for CoVid patients who have survived has been from 10 to 13 days. Even if you have insurance, high deductibles may have cast you deep into debt.

State departments of insurance have been working closely with medical facilities to provide some relief, but mitigation efforts vary widely depending on the hospitals and the insurers. For the uninsured, the CARES Act is supposed to cover the costs. If your hospital takes money from the CARES Act Providers Relief Fund for your treatment, they are barred by law from seeking any further compensation. But not every hospital will attempt to take what is offered by the Fund. Some will prefer to attempt to recover more money for treatment by billing the patient directly, without regard to whether they have the means to cover the bill or not. If they don’t seek payment from the government, then the patient is liable for the debt.

People who are recovering from serious illness often lack the psychic resources to aggressively defend their financial interests. Often, particularly under present circumstances, they push it off until that future date when they feel more capable of dealing with unpleasant circumstances, and that is perfectly understandable. But a word of advice: When the new year arrives, and a lot of people who have been able to put off the unpleasantness of dealing with their debt suddenly find themselves on the receiving end of legal notices, or suddenly find their bank accounts seized or their wages garnished, there will be an avalanche of filings for bankruptcy. It is best, if that seems your best avenue to get out from under crippling debt obligations, to file as soon as possible.

You can be sure that lenders who have been put off will flood the courts with new filings. In the meanwhile, many of them have been busy trying to get out in front of matters, since most kinds of consumer debt collection have not been affected, though it takes time for filings to move through already burdened courts. You can also be sure that there will be an avalanche of bankruptcy filings at that time. The experts at Burr Law can help you make the decisions that will discharge your obligations with as little pain and loss to you as possible, and get you on your way to economic recovery as quickly as may be, whether that involves filing under Chapter 7 or Chapter 13.

Do yourself a favor, and call the experts at Burr Law. They will lay things out simply for you and help you make the decisions that will put you in position to get the Debt Monster off your back, so you can begin to breathe freely again.

You are not alone. Give Burr Law a call.

Medical Debt Bankruptcy can eliminate Medical Bills

Medical Bill Debt, Bankruptcy and Your Options

Medical debt is a crippling issue for Wisconsin, and there’s no telling how it might harm communities. Medical bill bankruptcy is a serious issue that can be hard to anticipate. Despite your best efforts, you may fall into irrecoverable debt and need help.

Current Affairs in Wisconsin

Wisconsin isn’t the most debt-ridden state, but that doesn’t mean people aren’t suffering. For instance, although one study showed that the South was the most debt-burdened, the same data also revealed that Milwaukee County was among the nation’s leaders in bankruptcy filings.

It’s also worth noting that Wisconsin may be home to especially vulnerable populations. Thanks to steady poverty rates and other factors, people who incur high medical debts could face other hardships as a result. For instance, a low-income individual who experienced a severe accident might see their credit score fall because they couldn’t afford the bill.

The Scope of Medical Debt

This problem might not be such a dire issue if people’s finances weren’t already precariously risky. With the total U.S. consumer debt blasting past $13 trillion by late 2017, Americans took on more credit card, vehicle, mortgage and education liabilities.

Wisconsinites are no different than their neighbors in other states. For the typical household with thousands of dollars in existing debts, unexpected medical debt might be the last straw.

Why Is Medical Bill Bankruptcy a Possible Solution

Medical debt is a form of unsecured debt. In other words, they’re debts that you take on without having to put up any collateral.

Bankruptcy law is designed to relieve consumers who can’t pay their debts. The rules clearly define which kinds of obligations are excusable and which aren’t. When it comes to unsecured debts, things like student loans and child support can’t be discharged, or excused. Fortunately, there’s no such limitation on medical bills.

Specific Rules to Bear in Mind

Can you discharge all of your medical debts by filing for bankruptcy? There are a few things to consider first.

Two common bankruptcy types are Chapter 7, or restructuring, and Chapter 13, or reorganization. Each kind of filing resolves the debt in its own way, and there are restrictions on who can use which option.

total limit of $394,725

  • In a Chapter 13 filing, you’ll try to come up with a repayment plan that works for both you and your creditors. Although unsecured debts are excusable, they all get lumped together, and there’s a total limit of $394,725.

pass a means test to qualify

  • With Chapter 7, you’ll have a bankruptcy trustee sell some of your property to satisfy your creditors. It doesn’t matter how much unsecured debt you owe, but you need to pass a means test to qualify.

Is filing for a Wisconsin bankruptcy right for you? Contact us at (262) 827-0375 to get the advice of an experienced Wisconsin bankruptcy attorney. If you have significant medical debts, it could be the wisest move.

How Medical Bills Became the Leading Cause of Bankruptcy

Consumers who are struggling under a mountain of debt often turn to bankruptcy as the last viable solution to help them get a fresh financial start. While a wide range of factors can contribute to bankruptcy—including student loan debt, poor investments, divorce, job loss, and other unforeseen circumstances—medical debt is the clear leader when it comes to Chapter 13 and Chapter 7 relief. Read on to better understand why medical bills so often lead to bankruptcy.

Economic Downturn

If you have recently taken a financial hit, you are not alone. The crisis in the home mortgage market coupled with the recession has left millions of Americans out of work or underemployed. While thousands of medical bankruptcies are filed by men and women who lack health insurance, the vast majority of Chapter 13 or Chapter 7 bankruptcies relating to medical debt are actually obtained by patients who had health insurance at the time of illness or injury and simply lacked the extra money to pay.

Excessive Bills

Why is it so difficult to pay for medical expenses even with health insurance? Not only are Americans low on cash, but medical bills can also quickly pile up. Individuals who are diagnosed with painful injuries and chronic illnesses require lifelong medicine and doctor’s care, while others suffer sudden and tragic accidents that lead to thousands of dollars in expenses. On average, medically bankrupt families have nearly $18,000 in out-of-pocket costs.

Income Loss

Unfortunately, falling ill or being hurt in an accident all too often translates into missed work. Some patients are never able to return to their jobs at all, while others must make do with part-time work. Without an income, bankruptcy is the only solution.

It is possible to declare bankruptcy and move on with your life. At Burr Law Office, our attorneys we provide Milwaukee affordable bankruptcy and debt relief services to help eliminate or consolidate your debts, and we understand your situation. We have helped countless clients find relief with Chapter 13 or Chapter 7. Call (877) 891-1638 to discuss your filing options with an experienced Milwaukee bankruptcy attorney.

Common Reasons Why Seniors File for Bankruptcy

Between 1991 and 2007, the number of Americans age 65 and older who filed for bankruptcy more than tripled. Today, senior citizens are the fastest growing group of adults to initiate Chapter 13 and Chapter 7 filings. Here are some of the reasons why older Americans have found themselves overwhelmed by their expenses.

Medical Bills

Major medical expenses can be hard on anyone’s pocketbook, but aging men and women often face additional health concerns. If a senior citizen doesn’t have health insurance, even doctor’s checkups can quickly become unaffordable. Sadly, without proper medical attention, illnesses that go untreated can quickly develop into serious or even chronic conditions. Seniors who must pay thousands of dollars to physicians, hospitals, and specialists are often faced with bankruptcy.

Credit Card Debt

Elderly Americans most often file for the same reason as their younger counterparts: credit card debt. In fact, approximately two-thirds of debtors age 65 and older cite overwhelming credit card debt, interest, and fees as their primary reason for declaring Chapter 13 or Chapter 7. Experts have found that seniors are more likely to feel embarrassed about their mounting bills and frequently simply take out more credit cards to avoid their inevitable financial problems. But when they fail to make minimum credit card payments, filing is usually the only option available.

Inadequate Preparation

If you have been neglecting your nest egg for more pressing financial obligations, you are not alone. Thousands of elderly Americans report being late on rent or mortgage payments, and many even go without required medication or food in an effort to pay off mounting debts. Unfortunately, returning to the workforce is simply not an option for some seniors who failed to anticipate the economic downturn.

Whether you are drowning in medical debt or face insurmountable credit card fees, you have legal options. To speak to a Milwaukee bankruptcy attorney about whether filing may be your best option, call Burr Law Office at (262) 827-0375 to schedule a free consultation today.

See also “Top 5 Reasons People File for Bankruptcy

Spotlight on Medical Bills as the Leading Cause of Bankruptcy in the U.S.

Bankruptcy is often a last resort for people who have experienced major unplanned financial hardships. In the United States, the five leading causes of bankruptcy are medical expenses, job loss, poor use of credit, divorce or separation, and unexpected expenses such as property loss through a natural disaster. Read on to learn more about why medical bills top this list.

Majority of Personal Bankruptcies

In a study of 2007 bankruptcy filings, medical problems were found to have caused 62 percent of all personal bankruptcies. Of those who filed, more than 75 percent had medical insurance when their illness began.

Cost of Medical Expenses

In the same study, researchers looked at the average out-of-pocket expense for those who filed personal bankruptcy. For those with private insurance, the average medically bankrupt family was out almost $18,000. Families who were uninsured saw an average medical bill of nearly $27,000.

Most Expensive Illnesses

The study found that individuals with diabetes and neurological illnesses, such as multiple sclerosis, had the highest costs of those who filed. For half of the families in the study, hospital bills were the largest single expense.

Link to Bankruptcy

Being uninsured or underinsured is a big problem for many American families. When faced with expensive medical bills, many people will be forced to mortgage their homes, leave their jobs, and use credit cards. In another study in 2007, researchers looked at low- and middle-income households with credit card debt. In these households, 29 percent of families had used their cards to pay off medical expenses.

Have you experienced a major financial upset? Bankruptcy may be the best option for your situation. To speak with a Milwaukee bankruptcy lawyer, call the Burr Law Office at (262) 827-0375. We provide affordable debt relief services to help you get a fresh financial start.