Medical bankruptcy means a personal bankruptcy filed because the debtor is unable to cover his or her medical bills. Medical bankruptcy is thus a reason to file for Chapter 7 or Chapter 13; it is not a third type of bankruptcy. Medical bankruptcies often happen to uninsured people and their families but they can also strike the insured. For example, many insurance plans only pay a certain percentage of medical bills and/or have a cap on the total amount paid per year. If the bills are high, such as for an extended hospitalization, the uncovered portion of the bill, i.e. the amount owed by the debtor, can be too much to afford.