If you have recently been in a serious accident, the cost of treatment might be a little too high for you to afford it. This is probably one of the reasons why so many people prefer to eliminate high medical bills in bankruptcy after an accident.
According to a study conducted by the Commonwealth Fund in 2007, nearly 79 million Americans struggled to pay medical bills. This can be largely attributed to the fact that the cost of healthcare has been increasing for the past few years. The HealthCare and Utilization Project in 2009 estimated that uninsured patients who were hospitalized incurred an average cost of $19, 400 per stay.
As you can see, medical debt is a financial struggle for many and that is why so many people are eliminating high medical bills in bankruptcy. However, before you talk to your personal injury lawyer about eliminating medical debt in bankruptcy, here are a few options you should consider:
Negotiate a Settlement with Your Medical Provider
First, make sure all insurance coverage issues have been resolved. Once this has been taken care of, consider negotiating a settlement with the insurance provider. If the bill is for uninsured medical costs, request the medical provider to waive some of the costs. Most hospitals routinely offer discounts for patients who are uninsured.
You can also propose other options such as:
Payment Plans. Some medical providers allow patients to pay their medical bills over time. They may or may not charge you interest. All payment terms should be in writing.
Down payment in exchange for a reduced rate. Offer to pay as much as 25% of the bill in exchange for a discount.
Hospital Care Assurance Program
Depending on your level of income, you may qualify for reduced or free hospital care under the Hospital Care Assurance Program. HCAP can fully or partially cover expenses for all the necessary medical treatments that you need. Find out if you are qualified for the program by talking to the hospital’s financial aid counselor.
Affordable Care Act
When it comes to medical billing, non-profit hospitals that enjoy federal tax exemption may be obliged to waive your medical bills under the Affordable Care Act. These hospitals are legally obligated under the IRS rules to provide low cost or free medical care to low income individuals.
Review Your Medical Bills
The federal Accounting Office claims that approximately 99% of all hospital bills contain overcharges. If you look closely at your medical bills, you might just find something that you have been overcharged for.
Filing for Chapter 7 Bankruptcy
If you have tried all the above options but you are still not able to pay all your medical bills, then you can file for bankruptcy with the help of your personal injury lawyer. However, before you proceed with this request, there are a few things you should be aware of:
First, debts are treated differently in bankruptcy cases. Some debts are considered more important than others so this will determine how bankruptcy will affect your particular debt. There are four types of debts:
Non-priority General Unsecured Debts
These debts don’t need any special treatment and are usually the last to get paid in Chapter 7 Bankruptcy. Such debts are even discharged without any repayment and they include medical debts, unsecured personal loans and credit cards.
These debts cannot be wiped out by filing for bankruptcy. Such debts include child support and alimony.
Any debt that does not require collateral is an unsecured debt. Unsecured debt is categorized into priority and non-priority debt.
Any debt that requires collateral is secured debt. An example includes mortgage or car loans.
How is Medical Debt Treated in Chapter 7 Bankruptcy?
Medical debt is considered a non-priority unsecured debt in Chapter 7 bankruptcy. This means that the remainder of your debt will be completely wiped out once you have been discharged from the hospital. So if you are struggling to eliminate high medical debt, Chapter 7 bankruptcy might be a good option for you.
If you want to eliminate high medical bills using Chapter 7 bankruptcy, you can talk to one of our personal injury lawyers at Kevin P Landry Offices by dialing 508-775-1660 or by visiting our offices in Hyannis for a free initial consultation.