The United States is the world’s only developed country not to offer universal health care. No matter what the school of thought is on a solution, most people can agree that the health care system in America is broken. Your family may include one of the 70 million people in this country who is struggling with medical debt, or is having trouble paying for the cost of medical treatment. Nearly 75% of these people are middle class Americans, who often have insurance. This year roughly 1.5 million people will claim bankruptcy. Around 62% of those who file, will do so because of the burden of medical debt. Runaway debt of any sort, coupled with aggressive debt collectors and harsh collection practices, can cause a variety of financial and personal problems. The problematic stress caused by these issues has caused many middle american families to collapse under the pressure .
No one plans on becoming ill and accidents in life are often unavoidable. Debt incurred by seeking medical treatment is thought of as being more forgivable than many other types of debt. Most medical debt is broken down into:
- Hospital costs which account for roughly half of the expenses (48%),
- Prescription drugs (18.6%),
- Doctor’s bills (15.1%) and
- Insurance premiums (4.1 %).
- And medical equipment and nursing home care rounded out the list.
One serious mistake many people make is putting payment for treatment on credit or converting outstanding debts to credit cards. Medical debts aren’t always reported to the major credit agencies, unless there is delinquency or are assigned to collections. Alternately, if your debts are held by a credit card company or are on a line of credit, your debts will most likely begin to affect your credit. There are many options besides compounding your medical debts with credit debt. Before you step down that slippery slope, consider these alternatives:
- Set up a payment plan with your healthcare provider. Be sure that it is feasible and stick to the plan. Also get it in writing and ask your medical provider to supply you with a copy.
- Negotiate. You may be able to have fees for certain services reduced. Attempt to speak to your medical providers in order to have certain portions of your bill reduced. Also review your hospital bill thoroughly, and make certain there is nothing contained within that you dispute. Disputes should be brought to the attention of your healthcare provider before you agree to pay, and particularly before you put it on credit card.
- Charitable programs. Do not be afraid to ask your hospital if there are any programs available, especially if your hospital is a non for profit. Occasionally they are not widely publicized and the patient must seek them out. Hospitals often have advocates and financial counselors who will let you know if you are eligible for charitable programs that may pick up all or part of your costs for services. Also, your city or state may have assistance programs in place; and deferring to your local government and its social services may be a viable option.
- Ask for help. There are several non for profit credit counseling agencies that can help organize bills and help make a payment plan that is feasible for your family.
- The Access Project toll-free at 866-918-5232, ext. 231, can provide advice in relation to debt resolution.
- Agencies for credit counselors include the National Federation of Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. Each has an online referral service to certified local counselors.
- GreenPath Inc. can be reached at 866-476-7284.
If your family is being crippled by excessive debt due to medical bills, bankruptcy may be the best option for you. There are two common types of bankruptcy that may alleviate these burdens. Chapter 7 Bankruptcy will likely eliminate most of your medical debt. Immediately after filing, the court will order an automatic stay, forcing collection agencies, hospitals, and billing serviced from contacting you further. They must cease all collection efforts including letters and harassing phone calls. A Chapter 13 Bankruptcy works in much the same way, however; in a Chapter 13, a repayment plan is devised based on what your personal financial capabilities are. In either circumstance, debt collection efforts are halted.
If a hospital or doctor has filed a lawsuit in order and procured a court ordered judgment against you, your creditor has the option of filing a lien against your personal property. Your assets, like your home, could be secured for payment. If that happens you could lose the ability to sell or refinance your home. If a judgement is placed against you, you are also in danger of having your wages garnished or you accounts frozen, until your creditor receives payment. Hiring a bankruptcy attorney to work on your behalf is essential if there is a possibility of this happening to you; as bankruptcy is an efficacious way to remove liens against your personal assets, and return access to wages and bank accounts.
Everyone has different circumstances. If you feel that your debt is insurmountable, and your life is a constant stream of debt collectors and harassing calls, it may be time for you to consider consulting with an experienced bankruptcy lawyer. Speaking with a professional, dedicated your best interests, who will help determine the best option for you today, is the next step to a happier, healthier tomorrow. Contact Attorney Robert H Pflueger at Orlando Bankruptcy Law Firm, to meet a qualified professional who will design a custom plan suited to your particular situation, and who will be a strong ally and advocate for you.