A Guide to Medical Debt
It is no secret that the enormous cost of medical care in this country is often the cause of financial stress. This is not just a problem with the uninsured. Most people that have unpaid medical debt have medical insurance but have suffered an unexpected serious illness or injury. If you are drowning in medical debt with no way out, you do have options. Filing for Chapter 7 bankruptcy is a way for you to discharge your medical debt. Below is a basic overview on how medical debt is treated in bankruptcy.
What Exactly Is Medical Debt?
Debt is defined by the Fair Debt Collection Practices Act as, “a consumer’s obligation to pay money arising out of a transaction in which the money, property, insurance, or services that are for personal, family, or household purposes.” This means anytime you sign a contract with the hospital or clinic to treat you, you agree to pay whatever your insurance company doesn’t cover. If your insurance company refuses to pay anything, you may be responsible. You have rights with medical debt to dispute it if you feel you were billed incorrectly.
Don’t Ignore It
Unfortunately, many people tend to ignore medical bills hoping that they will go away. When you are injured or sick, you may just simply be too tired or stressed to deal with your bills. It is important that if you feel as though the bills are snowballing that you work with either a financial counselor to set up an affordable payment plan, or discuss your situation with a medical debt bankruptcy attorney. Look up a few experienced attorneys in your area and set up an initial consultation. They will be able to look at your particular situation and establish whether bankruptcy makes sense for you. But first, here’s a few ways to deal with medical debt.
Strategies for Facing Medical Debt
One of the biggest causes of bankruptcy is medical debt. Sad part is, the majority of people that are forced into bankruptcy had medical insurance. Medical debt is known as “unsecured debt” and can be discharged during bankruptcy. Bankruptcy is not the only option however. Here are a few other strategies for dealing with medical debt.
Talk to the Hospital
Many hospitals and medical providers will work with you on a payment plan. Create a monthly budget and work out how much you will be able to pay per month. Discuss this with your hospital’s financial department. Many hospitals will not charge interest for the first year and will not send your bill to collections if you have a set payment plan. They may also cut you a discount if you do not have insurance. Never underestimate the power of a phone call.
Fight the Insurance Company
If your debt is largely in part because of your insurance denying coverage, you can appeal their decision. This is difficult and may require the help of an attorney. If they still deny, you may be stuck with legal bills in addition to your medical bills.
There have been far too many instances of desperate people who encounter severe financial problems due to medical expenses. For example, a person may have an illness treated with an experimental drug or other type of treatment, and an insurer may not cover it as a result. In other cases, people have to undergo multiple surgeries or long-term physical therapy and their insurance simply runs out. What’s even worse, if the person in ill health is the main wage earner, the family could quickly be in dire financial straits.
If you are faced with having to pay for essentials such as food, clothing, and shelter or paying your medical bills, then filing either Chapter 7 or Chapter 13 bankruptcy may help you regain a sense of control over your finances. Both options provide a way to eliminate medical debt – if you file Chapter 7 you must be under a certain income level, but if you file for Chapter 13, you could still discharge a large amount of that debt. It’s extremely important that you speak with a professional so that you have all of the information you need to make the best choice possible.
Medical Bills and Bankruptcy
Dallas / Fort Worth / Plano Chapter 7 and Chapter 13 Bankruptcy Lawyer
According to a report published in the August 2009 issue of the American Journal of Medicine, debt due to medical bills affects roughly 60 percent of people filing for bankruptcy. This number has risen since 2001 when debt due to medical bills was a factor for roughly 46 percent of those declaring bankruptcy. When researchers who conducted the study interviewed people who filed for bankruptcy, interesting facts emerged. For instance, 78 percent of those who declared bankruptcy due to medical bills had health insurance. However, due to gaps in coverage, deductibles, co-pays or coverage limits, medical costs exceeded their ability to pay for treatment. In some cases, long-term illness led to job loss and loss of health insurance coverage.
If you would like information on wiping out medical bills under the terms of a Chapter 7 or Chapter 13 bankruptcy, contact Dallas / Fort Worth / Plano, Texas, bankruptcy attorneys at Leinart Law Firm. We can evaluate your situation and discuss the best options available to you.
If you are overwhelmed with medical debt and can’t get back on your feet, you need to speak with an experienced bankruptcy attorney. You need an advocate on your side to help you with your case. Contact Leinart Law Firm at (469) 232-3328 today to schedule your consultation with one of our knowledgeable attorneys.