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Addressing unpaid medical bills in bankruptcy

| Aug 12, 2016 | Debt Relief |

If you struggle with burdensome medical debt, know that you are not alone in the struggle. With continuing challenges in the economy and the continually increasing costs of medical care, many Americans carry some degree of medical debt.

The problem is not limited to those who don’t carry health insurance, either. While the numbers vary from study to study, insured, working Americans are certainly not exempt from being snowballed by medical debt. Those who work in the bankruptcy process are well aware, as well, that medical bills are one of the most common forms of debt reported in bankruptcy filings. 

One of the challenges of medical debt is that the healthcare industry is notorious for quickly selling unpaid debts to collection agencies. When debt collectors take on that debt and begin collection activities, things can get really stressful for the debtor as the heat is turned up. Federal law prohibits certain abusive collection tactics, but debtors often don’t know their rights and may not believe they can afford to hire an attorney to enforce their rights. They may also feel guilty for being unable to pay off their bills, like they deserve the trouble they have.

One of the benefits of bankruptcy is that it automatically initiates an automatic stay on all collection actions, which prevents creditors from continuing collection efforts. Bankruptcy has other obvious benefits, of course, depending on the form of bankruptcy protection in question. Medical debt is dischargeable in bankruptcy, and debtors can use the process to secure relief from this form of debt.

Most people who seriously consider a bankruptcy filing have additional debt other than medical bills, and it is important to look at the totality of a debtor’s situation rather than any part in isolation. Burdensome medical debt is rarely going to exist apart from other significant debts. Those who feel they may benefit from a bankruptcy filing in dealing with medical bills and other debt should contact an experienced attorney to have their situation evaluated and to determine whether bankruptcy is right for them. 

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