Editorial Policy

Can vet bills be included in bankruptcy?

Erica Sandberg

March 25, 2014

QHi Erica,

I am considering bankruptcy because I can't pay my bills, but I need to know if I can include vet bills. From what I read, I can't include luxury items. Are they considered luxury because they are not for me but for surgery for my dog, Jake? I owe $6,150 for one of Jake's operations. They put me on a CareCredit payment plan, but I really can't pay. The only other debt I have is a credit card that I owe $11,000 on. But, it would not be worth it to do a bankruptcy on that, right? I also don't want my vet to know because I still use him. Please advise. –Carolyn

ADear Carolyn,

Assuming you qualify for bankruptcy protection, you can include many types of debt in a Chapter 7.  Yet, as you've discovered, there are restrictions regarding what you are permitted to walk away from. Court fines, most student loans, recent income tax debt and child or spousal support, for example, can't be discharged.

Debts incurred for luxury goods? They can be a problem. If you charge over $650 within 90 days of filing for such things as vacations and jewelry, you run the risk of the creditor balking if you attempt to include them. It's possible that they'll assert that you're trying to get away with something that you oughtn't.Ask Erica

I can understand why you're worried about how Jake's expenses may be perceived, because some might view animal care as an extravagance. I asked San Francisco bankruptcy lawyer Jeena Cho if she thinks they'd be flagged for questioning. In general, vet bills are dischargeable, says Cho, who explains that you'd only be stuck with them if you “incurred the debt with intent to defraud.” I don't get the impression you did that.

Don't worry about your veterinarian being notified. While someone at the office may have suggested you apply for CareCredit, these accounts are unrelated to the provider. CareCredit is an unsecured credit line that people can use to pay for human as well as animal medical bills. GE Capital is the financial institution behind the company, and it has picked up the tab for your dog's care. Your veterinarian has already been paid and will not be aware of the bankruptcy.

Still, be sure that Chapter 7 bankruptcy is your best option. This legal process is for people who cannot pay their debts now and in the future, and it will stay on your credit report for 10 years, affecting your ability to get the credit cards of your choice, good interest rates on a mortgage or car loan, and even certain apartment leases or jobs. Sure, $17,000 is a lot to shoulder, but perhaps you can increase your income to meet the payment or sell some assets to decrease the balance, thus reducing the payments. Try going to a credit counseling agency first. They may be able to help you budget your expenses down enough so you can use their debt repayment plan. Also, look into a Chapter 13 bankruptcy: You can satisfy your debts through the court, with no interest and penalty fees added to the balance. (Chapter 13 stays on your credit report for seven years.)

If Chapter 7 bankruptcy is your only hope for resolution, then go for it. It will give you the opportunity to begin again, free from the payments you've been struggling with. I wish you and Jake a very healthy future.

Got a question for Erica? Send her an email.