What Are Someone’s Options for Resolving Overwhelming Medical Debt?
The number one reason for personal bankruptcy is not unemployment or irresponsible spending. Medical debt is currently the leading reason for bankruptcy. If you’re struggling with medical debt and considering bankruptcy, contact a North Carolina medical debt attorney at once.
Many health insurance policies will not cover extensive medical needs. CNBC reports that over 100 million people in the U.S. are having difficulty paying their medical debts. That should not be a surprise when a stay at most hospitals in the U.S. costs over $5,000 a day.
Our medical costs increase as we age. In fact, in North Carolina, many people over age 65 cannot pay their medical bills even with help from health insurance and government benefits.
What Are the Consequences of Medical Debt?
Medical debt has severe consequences. The fear of medical debt causes many people to ignore their own health problems. Researchers have found that almost a third of the adults in this country have postponed medical treatment because they’re worried about going into debt.
Among those whose medical debts have been referred to collection agencies, 15 percent are more than $10,000 in debt, 17 percent also owe a payday lender, and one-third still owe on a student loan, according to the Kaiser Family Foundation.
In North Carolina, many of those who choose bankruptcy have been – or are now – injured or seriously ill. And as the “baby boom” generation ages, bankruptcy numbers are expected to continue increasing – in North Carolina and the other 49 states – for the foreseeable future.
How Should You Deal With Overwhelming Medical Debts?
If paying medical bills is becoming difficult for you, make sure that you are not receiving duplicate bills and that you actually owe what you are being charged for. It’s possible you are being charged mistakenly – or in some cases, illegally – for a debt you do not owe.
In fact, if the party that is billing you is a debt purchasing company, it’s possible that you owe that company nothing, but you’ll need to discuss the matter with a North Carolina medical debt lawyer.
However, if the medical bills that are overwhelming you are your own legitimate debts, you may be considering bankruptcy, but that’s not necessarily your only option. Some medical providers will allow you or your attorney to negotiate a debt payment plan.
Do You Need a Bankruptcy Attorney?
If your medical debts are piling up, you may be running out of options, but before you file for bankruptcy, ask a North Carolina medical debt attorney to review your debts, income, properties, and assets. Bankruptcy is a last resort, and it comes with some temporary negative consequences.
But if you let your medical debts accumulate, and you take no action whatsoever, eventually you may have to file a bankruptcy petition or risk losing everything. For example, a medical provider could sue you for a debt and win a judgment against you.
If that happens, a lien may be placed against your property and your wages may be garnished. However, filing for bankruptcy before a creditor sues you prevents creditors from placing a lien on your property or garnishing your wages while your bankruptcy is pending.
What Are Your Other Options for Handling Medical Debt?
If you have good credit, you might be able to negotiate a payment plan with your medical creditors. Many hospitals and healthcare providers routinely discount or even write off bills for patients who pay with cash and/or do not have health insurance.
If you owe a hospital, you should inquire about the assistance programs that many hospitals provide. Contact the hospital’s financial assistance counselor to find out more and to learn if you qualify for assistance.
If you can’t resolve a medical debt, and the creditor takes action against you, that action will appear on your credit report. But if you file for bankruptcy before a creditor takes action against you, that bankruptcy can eliminate your medical debt.
Are There Different Types of Bankruptcy?
If your income is limited, and if you pass the means test to qualify, a “Chapter 7” bankruptcy may be your best option. Your medical debts and your other unsecured debts (debts not secured by collateral) are discharged – that is, eliminated – with a Chapter 7 bankruptcy.
If you don’t pass the means test, or if you have assets that you do not want to lose, your other bankruptcy option is a “Chapter 13” bankruptcy. In a Chapter 13 bankruptcy, you pay off a portion of your debts, and what remains is discharged at the conclusion of the process.
Whether yours is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you’ll need to have personalized guidance and advice from a North Carolina medical debt lawyer who has thoroughly examined your current financial circumstances.
What Else Should You Know About Bankruptcy?
Federal law obligates those who file for bankruptcy to complete a credit counseling program before filing for bankruptcy and to complete a financial management program before the bankruptcy process concludes. Both programs are offered online and normally take 30-90 minutes to complete.
Your bankruptcy remains on your credit report for seven to ten years. Obtaining credit after bankruptcy takes some work, but secured credit cards and installment loans are two of the tools that many people use to start rebuilding their credit after bankruptcy.
A secured credit card is backed by the cash you deposit in a savings account, which functions as collateral on the card’s credit line. A small installment loan borrowed with a co-signer’s help can also rebuild your credit, provided that you make the payments in full and on time every month.
Learn More and Get the Advice You Need Now
If a creditor is harassing you or suing you for a medical debt, the award-winning medical debt attorneys at Gillespie & Murphy will discuss your rights and options and determine which remedy will work best for you.
We provide sound, candid legal advice to our clients who are struggling with medical debts. If filing for bankruptcy is your best or only alternative, an attorney at Gillespie & Murphy will prepare the paperwork on your behalf and guide you step-by-step through the process.
If you are sued for a medical debt, or if you need a solution right now to your medical debt problem, contact Gillespie & Murphy promptly by calling 252-659-5045 to schedule a free legal consultation with no obligation. Gillespie & Murphy will help you find the answers you need.