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Is the means test required before filing medical bankruptcy?

If you have a mountain of medical bills you cannot pay, you may decide to file bankruptcy.

However, you may not be familiar with all the requirements for filing a petition in the state of Wisconsin. For example, is it necessary for you to take the means test?

Health care and bankruptcy

According to a CNBC report, academic researchers have found that medical issues account for 66.5% of the bankruptcies in the U.S. The people who file for bankruptcy protection do so either because they cannot pay their medical bills or because their medical condition prevents them from working.

Families who find themselves crippled by medical debt do not have enough money saved to pay for an emergency situation. Inadequate health insurance coverage is the primary cause behind the high cost to the consumer and becomes the reason for mounting debt.

Bankruptcy options

If you are able to work and have a steady income, you may want to consider filing Chapter 13 bankruptcy. This will enable you to establish an affordable monthly plan to pay your medical bills within three to five years.

On the other hand, you might prefer Chapter 7 bankruptcy through which you can resolve the majority of your debts, including those medical bills. Many people who wish to file Chapter 7 must qualify by first passing the means test, but is this a requirement for medical bankruptcy filers?

The means test

If your income exceeds the median income in Wisconsin, you will have to pass the means test in order to file Chapter 7. However, if your income falls below the median you are exempt from having to take this test. You are also exempt if your debts are not primarily consumer debts. Therefore, if your medical bills are the main reason for your decision to file bankruptcy, you will not have to take the means test and can choose either Chapter 7 or Chapter 13 bankruptcy protection, whichever is the best fit for your circumstances.

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