A common myth that many in Salem may buy into is that only those who cannot manage their money are driven into bankruptcy. The fact is that most personal bankruptcy cases in the U.S. do not involve consumer debt at all. According to the results of a Harvard study shared by the Huffington Post, 62 percent of all bankruptcy cases in America were due to outstanding medical debts. If an accident or illness has left you dealing with a large amount of medical bills, bankruptcy protection may ultimately be your best option. If so, you then need to decide which form will work best for you.

If you are in a position where you struggle in paying your medical debts, it is likely due to a lack of income. For this reason, many in your position may prefer to file a Chapter 7 bankruptcy because it will wipe out most of your medical bills without requiring you pay anything. However, you must first qualify for this form of bankruptcy. Your ability to file depends upon you passing the Chapter 7 means test. This compares your monthly income to the median income in your state. If it is less, then you automatically pass. If it exceeds the median income, then your monthly expenses are subtracted from it to determine how much disposable income you have. The more disposable income you have access to, the less likely you are to qualify for Chapter 7.

If you fail to qualify for Chapter 7 bankruptcy, you may then choose to file a Chapter 13. In this case, you would be required to repay a portion of your medical debts over a number of years. The amount you would owe would be equal to what would have been discharged in a Chapter 7 case.