How will filing bankruptcy affect my ability to get health insurance?

When filing for bankruptcy, debts are categorized into three distinct types. The first type is priority debts, which are the initial and mandatory costs of the bankruptcy proceedings and any outstanding tax debts. The second is secured debts, which are debts that the creditors hold claim to tangible possessions of the debtor if left unpaid. Finally, there are unsecured debts, which account for all debts where creditors have no right to collect anything other than the outstanding monetary debt value from the debtor, such as health insurance, which is one of the most common causes for bankruptcy.

When assessed during bankruptcy, these debts are further distinguished by whether or not it is a consumer debt or not. Consumer debts are those created for attaining goods that are not required living expenses or are subject to depreciation. However, regardless of the type of debts involved, filing for bankruptcy will have a harsh effect on one’s credit score. But, as health insurance is obviously a living expense, it is generally unaffected by an individual’s credit score.

Though health insurance is technically an unsecured debt, the insurance companies have full control with the potential to halt the service according to the terms of the agreed policy. Because of this, the ability to gain health insurance is usually completely unaffected after bankruptcy.