The cost of medical care and attention can become overwhelming. Medical debt is a major cause of financial struggle for many people. It can cause patients and their families to rack up thousands of dollars in credit card debt, use up retirement savings, lose their homes or even file for bankruptcy.
Although high medical bills can be stressful and the complex health care system can become frightening, there are steps you can take to reduce your medical debt and its impact on your financial well-being.
You Have Options
Here are five of the most common options for dealing with large and sizeable medical bills:
- Ask for Discounts
Many providers spend a great deal of time and effort tracking down people who don’t want to pay any part of their medical expenses. So, when they encounter someone who is at least willing to pay a portion of the bill, they may be willing to make accommodations and provide discounts for services. Don’t be afraid to ask for a reduction in costs for your care.
- Negotiate a Settlement
If you are fortunate enough to have good credit, start by making sure you have resolved all insurance payment issues. Once you have received all of the available insurance coverage, consider negotiating a settlement with the creditor. If the bill was for uninsured medical costs, then the medical provider may consider waiving a percentage of the bill.
- Payment Plan
Explore the option of paying the bills over time. Some medical providers will accept a long-term, low-cost monthly payment plan. Other companies, however, will charge interest or additional fees. Always get all payment terms in writing so there are no surprises.
- Financial Assistance.
You may be eligible to receive financial help from the government, a nonprofit, or the hospital itself. Check the options of Medicaid, children’s health insurance from the state, local assistance programs or even the hospital or clinic itself. Many healthcare facilities offer programs to help cover or reduce medical bills.
If you cannot settle the debt and it looks as if the creditor may pursue you for payment, then your good credit is going to take a hit because it will show up on your credit report. And if the provider sues you and gets a judgment, they can garnish your wages or take other collection action. For these reasons, bankruptcy may be a good option to eliminate the debt and get you back on the road to financial recovery.
Two Types of Bankruptcy
Bankruptcy is often misunderstood and comes with a negative stigma. The reality is that filing for bankruptcy is one of the best options for people who have fallen into substantial debt since it allows them to begin rebuilding their lives and helps them to get back on their feet.
You may be able to eliminate your medical obligations by filing for either Chapter 7 bankruptcy (most common and allows for eliminating debt) or Chapter 13 bankruptcy (more complicated and allows for reorganizing your debt, but also may protect your assets). Not all debts are treated the same in bankruptcy and certain debts are given higher priority than others. As a result, how bankruptcy affects a particular debt depends on the type and classification.
The process can be complicated and confusing. That is it is essential that you contact a qualified professional. A knowledgeable bankruptcy attorney can explain the entire process and determine if Chapter 7 bankruptcy or Chapter 13 bankruptcy is right for you. A skilled lawyer will help you understand your options and ensure that you confidently choose the solution that will work best for you. Only an experienced bankruptcy attorney can provide you with the resources you need to understand your opportunities in the convoluted bankruptcy process. At Holland Law Offices, we will be your advocate throughout the entire bankruptcy process and work to defend you and your property.
Chapter 7 Bankruptcy for Medical Debt
The rising cost of medical care and the growing number of Americans without adequate health insurance coverage has led many people to file Chapter 7 bankruptcy to eliminate their medical debts.
There are very specific qualifications you must meet to file Chapter 7 bankruptcy. If you do not earn a lot of money and have few assets, then a Chapter 7 bankruptcy may be a good choice for you. In most cases, medical debt, like most other unsecured debts, will be wiped out in Chapter 7 bankruptcy. In order to understand the requirements, be sure to contact a licensed professional who is trained and certified in the area of bankruptcy law in your city.
Chapter 13 Bankruptcy for Medical Debt
This type of bankruptcy is known as reorganizational bankruptcy and may be the better alternative if there is property you want to protect. This type of bankruptcy will allow you to pay off your debt in a period of three to five years instead of liquidating your valuable assets to pay off debt.
In Chapter 13, you will have to pay back a portion of the medical debt through a repayment plan, and then the remainder will be discharged. Under Chapter 13, you may be able to retain your assets. You must make monthly payments to the court. This will allow your creditors to receive some, or all, of the money that you owe them. As a result, it is of the utmost importance that you develop a plan where you are able to afford the monthly payment.
A Tough Decision
Sometimes when medical bills have overwhelmed you and your family, considering bankruptcy may be a good solution. But it is not a decision you should make on your own. The best way to find out if it’s the right choice for you is to consult with an experienced bankruptcy lawyer.
At Holland Law Office, we specialize in finding you relief from your debts. Visit our website to see what our clients say about our services. Please call us at 970-283-7133 to schedule a free, no-obligation consultation. Your debt-free future is waiting.