Get Rid Of Medical Debt
Medical debt can catch you by surprise. A medical crisis can cause medical expenses to skyrocket, and many people are unprepared for the bill that follows. Neonatal care, chemotherapy, rehabilitation and other treatments can wipe a family out.Thousands of Americans struggle to manage hospital bills and other medical debt. The rising cost of health care means this number continues to grow.
If you have not considered bankruptcy before, now may be a good time. Bankruptcy laws recognize the special nature of this debt and have special rules for people with medical debt.
Talk to an attorney at The Law Offices of Ronald I. Chorches. Our firm has decades of experience helping people take care of debt through bankruptcy and other debt relief solutions.
According to the World Health Organization, Americans spend more per capita on health care than any other nation, roughly 10 times the global average. Health care spending in the U.S. rose 5.8 percent in 2015 to $3.2 trillion – or an average of $9,980 per person.
Given these alarming statistics, it is no wonder millions of people struggle to pay their medical bills. As a result, an illness or injury – or even just accumulated clinic visits – can cause overwhelming medical debt.
Since medical debt is dischargeable through bankruptcy, many people are turning to this option for relief. In fact, in a 2013 study, NerdWallet Health estimated that 1.7 million people lived in households that declared bankruptcy. This figure has likely increased since that time.
“In 2013 over 20 percent of American adults are struggling to pay their medical bills, and three in five bankruptcies will be due to medical bills,” said Christina La Montagne, VP of Health at NerdWallet. “While we are quick to blame debt on poor savings and bad spending habits, our study emphasizes the burden of health costs causing widespread indebtedness.”
Bankruptcy can be a tool to help with medical debt in different ways, depending on your situation. Chapter 7 bankruptcy calls for a total discharge of these unsecured debts, but has specific qualifications that must be met. Chapter 13 discharges some debt and organizes the rest into manageable payments to be made over three to five years.
What Is The Advantage Of Filing Bankruptcy?
It is not unusual for people who want to pay their debts out of a sense of duty, but the truth for most people with medical debts is that the debt is simply too great to pay back. You should not have to pay for the rest of your life for an event you did not plan for. Bankruptcy provides a way out.
There are two kinds of bankruptcy most individuals choose. Chapter 7, which discharges (and essentially eradicates) unsecured debts like medical debt and credit card debt.
Chapter 13 bankruptcy is another option. It involves people making payments to the court over a period of three to five years. Generally, most people only end up paying back a small portion of their debt in Chapter 13. Any unsecured debt remaining at the end of the payment period is discharged.
What Is Medical Bankruptcy?
Often people choose to pursue Chapter 7 bankruptcy. For most, the top concern is qualifying for bankruptcy. To be eligible to file Chapter 7, individuals must pass the Means Test, which looks at income and expenses for a household.
Individuals whose medical debt is more than 50 percent of the total debt (including mortgage) may pursue a medical bankruptcy. Individuals filing this type of bankruptcy do not have to pass the Means test.
Many Hartford, Connecticut, residents do an excellent job of managing their finances. However, sometimes debt can accumulate for even the most careful financial managers, necessitating an understanding of good approaches to debt relief. That applies to unpaid medical bills, which can be particularly nerve-wracking for a lot of people since they tie to their health. After all, no one wants to delay needed current and future health care because of concern about bills for past health care.
One key way to address medical bills is to have a good understanding of what your medical insurance covers. Confirm with your medical insurance provider that the doctors you’ve chosen are in the right network. Also, understand how much your deductible will be for specific kinds of medical care, so that you will know how much of each kind of medical care that you get will be covered by your insurance and how much you will get billed for. Doing that homework in advance is a lot better than getting surprised with bigger-than-expected bills later.
If you do get a bill that is bigger than you can pay, figure out how much of it you can pay right away, and call the doctor’s office and offer to pay that amount right away in order to keep the bill from going to a collection agency. Doing that is best for you and for the doctor, so if you offer a reasonable amount, they will probably accept your offer and make arrangements with you to have you pay the rest at a future date when you can afford to.
One of the most important things is to be positive and constructive with the people you talk to. Your financial obligations are not their fault. Treating them rudely would just inspire them to refuse to help you, so treat them well, talk through the applicable facts and make a deal that works for all.
Let Us Answer Your Questions About Medical Debt And Bankruptcy
The Law Offices of Ronald I. Chorches in Hartford, Connecticut, is a firm with decades of bankruptcy experience. Debt relief is our singular focus. We are known for excellent client service and complex problem-solving. Our attorneys can answer questions like:
- Is it worth it to file for bankruptcy if my only financial problem is my medical bills?
- What will happen to my credit if I don’t pay these medical bills?
- Can I get rid of my credit card debt at the same time as my medical debt?
- Is Chapter 13 useful for dealing with unsecured debt like medical bills?
- Does the Fair Debt Collection Practices Act protect me from the harassment of medical bill collectors?
Every situation is different. You may be able to address your medical debt with or without bankruptcy. The important thing is to get the professional guidance you need.
Call Us For A Free Consultation | We Will Evaluate Your Situation Carefully
Talk to a highly experienced bankruptcy lawyer about your debt profile. You may be surprised to learn about the debt relief options you have. Schedule your free consultation with a lawyer at our firm or call 860-952-3878 to discuss your options.