Debts
What happens to credit card and medical debt in bankruptcy?
Credit card balances and medical bills are unsecured debts: the creditor holds no collateral. The FTC says both Chapter 7 and Chapter 13 may discharge unsecured debts like credit card or medical debt. In Chapter 7 the discharge order generally comes 60 to 90 days after the date first set for the meeting of creditors. In Chapter 13 it comes after a repayment plan that usually lasts three to five years. Some recent credit card use can be kept out of the discharge.1 2 3 4 5 6
Connect to a bankruptcy lawyerCredit card balances and medical bills are unsecured debts, the kind bankruptcy may discharge. This page covers how each chapter treats them, the rule about spending shortly before filing, and options to try first.
General information, not legal advice. Rules and amounts change; check with a lawyer or the court before you act.
In this guide
Why are credit card and medical debts treated alike?
Both are usually unsecured. An unsecured claim is one for which the creditor holds no security, such as a mortgage or lien. A secured debt is the opposite: it is backed by collateral, as with a home mortgage or an auto loan.1
The FTC groups credit card and medical debts together as unsecured debts, and says both Chapter 7 and Chapter 13 may discharge them.2
A discharge releases you from personal liability for the debts it covers, and it bars creditors from trying to collect those debts from you personally.7 8
How does each chapter treat these debts?
| Question | Chapter 7 | Chapter 13 |
|---|---|---|
| How the debt is handled3 4 | A trustee may sell property that is not exempt and pay creditors. The federal courts say most Chapter 7 cases filed by individuals are no asset cases, where nothing is distributed to unsecured creditors. | Unsecured claims are paid through the plan. They need not be paid in full, as long as you pay all projected disposable income over the commitment period and these creditors receive at least as much as a Chapter 7 liquidation would give them. |
| When the discharge comes3 4 | Generally 60 to 90 days after the date first set for the meeting of creditors | After you complete all payments under the plan, which usually lasts three to five years |
| Court fees9 10 4 | $338 (fee schedule effective December 1, 2023) | $313 (administrative fee effective December 1, 2023) |
Which chapter is open to you depends on your income, your property and your other debts. For a person with mostly consumer debts, the means test decides whether a Chapter 7 filing is presumed to be an abuse.1 11 12
Does recent credit card use cause problems?
It can. Some recent card use is presumed nondischargeable. For cases filed on or after April 1, 2025, the presumption covers the following.5 6
Goods or services reasonably necessary to support you or a dependent are not luxury goods.5 6
The creditor still has to act. Debts for money or property obtained by false pretenses or fraud are discharged unless a creditor files an action in time and wins. The complaint must be filed within 60 days after the first date set for the meeting of creditors, unless the court extends the time.3 13
Debt relief agencies, a term that covers those paid to provide bankruptcy assistance and petition preparers, may not advise you to take on more debt in contemplation of filing.12 14
What is not wiped out?
- Debts left off your paperwork. Debts not listed on the schedules filed with the court are among the most common debts that are not discharged, so a complete list of creditors matters.7
- Debts secured by property. A secured creditor may still be able to take back the property that secures its loan.3
- The debts the law keeps out of the discharge, such as alimony and child support, certain taxes and most government-backed education loans.3
What happens to collection calls and lawsuits when you file?
Filing triggers the automatic stay. While it is in effect, creditors generally may not start or continue lawsuits, wage garnishments or even phone calls demanding payment. Collection calls and letters count as acts to collect.3 18
After a discharge you may still choose to repay a discharged debt, even though it can no longer be legally enforced. The federal courts give a debt to a family doctor as an example.7
There is a cost. A bankruptcy can stay on a credit report for up to 10 years, and the FTC describes bankruptcy as generally a last option because of its long-term negative effect on credit.19 20 2
What can you try before bankruptcy?
The FTC advises people who are behind on bills to call their creditors before a debt collector gets involved and try to work out a payment plan they can manage.2
A credit counselor may recommend a debt management plan to repay unsecured debts like credit card or medical debts.2
The FTC warns that debt settlement programs can be risky: creditors do not have to agree to settle, late fees and interest can grow, and you can still be sued while waiting for a settlement. A debt settlement company cannot collect its fees before it settles a debt.2
If you do file as an individual, credit counseling from an approved agency within the 180 days before filing is required in any case.3 21
Common questions
Is medical debt treated differently from other debt in bankruptcy?
The FTC lists medical debt alongside credit card debt as unsecured debt that both Chapter 7 and Chapter 13 may discharge.2
Can I use my credit cards right before filing?
Recent use can be presumed nondischargeable. For cases filed on or after April 1, 2025, that covers more than $900 in luxury goods or services from a single creditor within 90 days before filing, and more than $1,250 in cash advances within 70 days.5 6
Will collection calls stop when I file?
While the automatic stay is in effect, creditors generally may not make phone calls demanding payment or start or continue lawsuits.3
Can I still pay my doctor after a discharge?
Yes. A debtor may voluntarily repay a discharged debt, even though it can no longer be legally enforced.7
What if I forget to list a credit card?
Debts left off the lists and schedules filed with the court are among the most common debts that are not discharged. Ask a lawyer or the court about correcting your paperwork.7
Sources
Official courts & government references- Glossary of Legal Terms (uscourts.gov)
- FTC Consumer Advice: How To Get Out of Debt
- Chapter 7 - Bankruptcy Basics
- Chapter 13 - Bankruptcy Basics (uscourts.gov)
- 11 U.S. Code § 523(a)(2)(C) (Cornell LII)
- Federal Register, 90 FR 8941 (Feb. 4, 2025), Judicial Conference: Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
- Discharge in Bankruptcy - Bankruptcy Basics
- 11 U.S. Code § 524(a)(2) (Cornell LII)
- 28 U.S. Code § 1930 (Cornell LII)
- Bankruptcy Court Miscellaneous Fee Schedule (uscourts.gov)
- 11 U.S. Code § 707(b)(1) (Cornell LII)
- 11 U.S. Code § 101(8) (Cornell LII)
- Federal Rules of Bankruptcy Procedure, Rule 4007(c) (Cornell LII)
- 11 U.S. Code § 526(a) (Cornell LII)
- 11 U.S. Code § 727(b) (Cornell LII)
- 11 U.S. Code § 301(b) (Cornell LII)
- 11 U.S. Code § 522(f)(1)(A) (Cornell LII)
- 11 U.S. Code § 362(a)(3), (a)(6) (Cornell LII)
- CFPB: How long does a bankruptcy appear on credit reports?
- 15 U.S. Code § 1681c(a)(1), FCRA (Cornell LII)
- 11 U.S. Code § 109(h)(1) (Cornell LII)