• Your medical debt may be discharged in a Chapter 7 bankruptcy case.patient image by JASON WINTER from Fotolia.com
  
  A Pennsylvania resident who has racked up medicals bills that she cannot pay may be able to gain some relief. A debtor may file for Chapter 7 bankruptcy and have her debts discharged. All debts cannot be discharged, however. Only the debtor’s unsecured debts may be discharged. Read on to determine if your medical debt qualifies for discharge.
  
  

Secured vs. Unsecured

• Secured debt is debt that is backed by collateral, meaning if a debtor misses payments on the loan, the creditor may take the property as payment. Think “foreclosure” and “repossession.” A mortgage or car loan would be an example of secured debt.
  
  Unsecured debt is debt that is not backed by collateral. If a debtor misses payments, the best the creditor can do is employ a collection agency to try to persuade the debtor to pay. Medical debt is unsecured, and if a debtor has medical debt, creditors are probably hounding him on a daily basis. If he cannot pay those debts, he should consider filing Chapter 7 bankruptcy. In Chapter 7 bankruptcy, medical debts are discharged.
  
  

Pennsylvania Median Income

• To qualify for Chapter 7 bankruptcy, a debtor must pass the means test. The means test compares the debtor’s income to the median income of the state of Pennsylvania. If the debtor’s income is less than the median, the debtor can file for Chapter 7 bankruptcy. The Census Bureau lists the median incomes for the state of Pennsylvania as: two-person families, $53,763; three-person families, $67,757; four-person families, $77,867; five-person families, $76,179; six-person families, $71,453; seven-or-more-person families, $67,571.
  
  

Disposable Income

• If the debtor’s median income is more than the Pennsylvania median income for a family of the same size, the debtor may still file for Chapter 7 bankruptcy by calculating his monthly disposable income. The debtor should deduct his allowed monthly expenses from his monthly income to come up with his monthly disposable income.
  
  If his monthly disposable income is less than $100, he can file for Chapter 7 bankruptcy. If his monthly disposable income is more than $100, but that amount would not pay 25 percent of the debtor’s unsecured debt if paid in monthly installments over five years, the debtor can file for Chapter 7 bankruptcy. If the debtor’s monthly disposable income of more than $100 would pay at least 25 percent of his unsecured debts if paid in monthly installments over five years, the debtor cannot file for Chapter 7 bankruptcy.