Bankruptcy Medical

So, you’ve got thousands of dollars in medical bills even though you have health insurance. Or, maybe you don’t have health insurance, so your medical bills are that much higher. Filing bankruptcy, regardless of the reasons, is pretty much the worst thing you can do, though some people have found that a fresh start takes the pressure off, even if they no longer have a bunch of plastic cards in their wallets. Most end up keeping their home and their vehicles by reaffirming with those creditors after the bankruptcy is discharged. But, if you don’t want to see your formerly good credit go completely down the tubes for the next 7 to 10 years, there are ways to avoid bankruptcy court.

The first rule is to answer the phone. Basically, everything is negotiable. Start by respecting the fact that the person on the other end of the phone is just trying to do their job. Don’t be verbally abusive and don’t be rude. You can even tell them that you appreciate their situation, but then be totally honest about yours. Ask if there is any way they can forgive part of the debt and then make a realistic payment plan for the balance. Don’t let them force you into charging your debt on a credit card or making monthly payments that you know you can’t afford. They would rather get a portion of the debt settled than to lose out on all of it. The same is true regardless if it is the hospital billing office you are dealing with, or a medical collection agency. Normally, it won’t have to go to collection if you just talk to the people on the phone. They are “people” too and though they are trying to collect a debt, most have compassion and empathy for you. Communicating with the doctor or the hospital itself can often result in a reduction of a portion of the debt and in some states if you just pay $5.00 a month on an outstanding bill, you are protected to the point that your wages cannot be garnished or a lien put on your property. So, make a plan and communicate that plan to those whom you owe the money to.

Another way to avoid medical bankruptcy is by preplanning. Amazingly, using a hospital or medical provider affiliated with a church can result in much more understanding and sometimes with complete forgiveness of the debt when a patient is experiencing serious financial hardship. The Roman Catholic Church seems to be the most forgiving in this situation.

Some people are attempting to pay bills that should have been covered by their medical insurance. If you are in any way unsure, then go to the person that holds the purse strings, which is usually the benefits administrator in your company’s HR department. They will usually go to bat for their employees when dealing with the insurance company and the insurance company has a vested interest in working with them. If a particular company has continual problems with a certain group health insurance, they are liable to take their business elsewhere. Most insurance companies would rather capitulate than risk losing a large client. On the other hand, if you have purchased your insurance on your own, then your ally will be your health insurance agent. He or she is also considered ‘important’ to an insurance company. If an agent loses faith with a health insurer, all he has to do is not recommend that insurer to his or her clients and the insurer will lose a lot of business. An insurance broker of some kind is definitely preferable to dealing with the insurance company personally. When dealing with an individual they don’t run as big a risk and are usually that much more unforgiving and aggressive when it comes to collecting on that debt.

If you feel that your health insurer has issued an unaffordable renewal rate due to your unpaid medical bills, then you can contact your state’s insurance department. It is illegal for insurance companies to raise premiums without proper justification. So, if you get a rate increase that you can’t afford or that you think is exorbitant, put together a 12-month log of your premiums and compare it to what your insurance company has paid out. Your state insurance commissioner will ask the insurer to justify the rate increase. In many instances this will be enough to make your insurance company back off. They risk losing a whole lot more if they get on the wrong side of the state.

You do have rights. According to the Federal Trade Commission’s (FTC) Fair Debt Collection Practices Act, anyone attempting to collect a debt:

• Can’t call before 8 a.m. or after 9 p.m.
• Can’t use profane or obscene language and also cannot repeatedly harass you by calling over and over again.
• Can’t continue to contact you if you send them a written request asking them not to; the only exception being if they are calling or writing to let you know they are taking legal action against you once you have sent them a written request to stop calling or writing.
• Can’t use misleading or false statements. They cannot say that they will arrest you if you don’t pay and they cannot pose as an attorney or government representative. In other words, they must be truthful about who they are and what they are calling you for.
• Can’t threaten you.
• Can’t publish a public list of people who are not paying their debts.

If any of these things are being done by a collection agency or by a hospital or medical care provider, contact the FTC personally.

Finally, definitely do not attempt to pay your medical bills by taking out a loan or putting it on your credit card. This is the one, glaring mistake that will force you into bankruptcy that much quicker. A loan or credit card balance will have you paying interest, which will not happen unless you let it. The hospital or medical provider cannot charge you interest on your unpaid balance.

The best defense is often a good offense. You might consider a health savings account as a proactive solution to avoid future medical bankruptcy. The money you put into a health savings account can grow tax-free and can be used to pay deductibles, co-pays and prescription costs. But, if medical bills are already piling up, just tackle them as you would most problems that crop up-head on!

If you are overcome with medical debts, medical bankruptcy may seem like the only option available to you. If you are drowning in medical bills, you do have options. If you cannot pay your debt, bankruptcy does not have to be your only option. Even if you have medical insurance, if you become seriously ill, you could face thousands of dollars in debt.

Leading to Bankruptcy

Every year millions of people have to file bankruptcy because of debts to doctors and hospitals. Millions of dollars are left unpaid to hospitals and doctors because of a person’s lack to pay. This results in damage to a person’s finances, hurts the medical community and can damage the economy.

Medical bankruptcy s a serious problem in the medical community and damages the economy. This problem exists because of Americans lack of insurance or ability to pay for services, and that is why the government and private companies provide medical grants. The government sets aside millions of dollars each year to help with financial aid and there are medical grants available to those who seek them.

Non-Profit Organizations

Various non-profit organizations host fund raising events throughout the year to help individuals suffering financial issues due to medical debt. If you are in need of assistance with medical debt, contact your local and statewide non-profit organizations to see if you are eligible for aid.

Other Alternatives

Another alternative to medical debt is to finance the medical issue beforehand if possible. Many hospitals have programs for those in financial need as they receive charitable donations every year. If you are aware of an upcoming surgery without insurance and don’t want the debt, you can contact the hospitals finance department to see if you qualify for a waiver based on your need or lack of income.

The great thing about medical grants is that they never need to be paid back. If you are in need of assistance with your medical debt so that you do not need to file bankruptcy, your first step is to ask for help. Individuals and the government do not typically want people to have to file for bankruptcy. Getting the medical debt is a win-win situation for both the person and the medical community.