Orange County Medical Bill Lawyer
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Debt Relief Options for Those Drowning in Medical Debt in Orange County, CA
Medical treatment in America is at an all-time high in terms of cost, and even routine procedures can leave patients in debt. If you are one of the millions of Americans with outstanding medical bills, you may be experiencing lower credit scores, dealing with collection calls, and even facing wage garnishment. Luckily, the Orange County medical bill lawyers at Marshack Hays Wood can help you erase your medical debt by filing for bankruptcy or negotiating with your creditors.
Call us at (949) 333-7777 to schedule a case evaluation with one of our medical debt professionals.
Can You File Bankruptcy on Medical Bills?
Yes, if you are struggling to pay medical debt, you can file for bankruptcy to help alleviate the stress of any unpaid medical bills.
What is a Medical Bankruptcy?
Medical bankruptcy is an unofficial name for bankruptcy, which refers to instances where someone files for bankruptcy because of their medical debt. Bankruptcy can’t be used to clear only one specific debt, but it will help clear almost all consumer debts a person has, including their medical debt, offering them a fresh start.
How Common are Medical Bankruptcies?
Due to the high cost of medical treatment in the U.S., many Americans struggle to pay medical debt. According to a 2019 study provided by the American Public Health Association, 66.5% of those who filed for bankruptcy between 2013 and 2016 cited medical expenses as one of the primary contributing factors that led them to file for bankruptcy.
Can Medical Debt Be Discharged in Bankruptcy?
Yes, if you file for bankruptcy, your unpaid medical bills can be discharged. One of the main reasons medical bankruptcy is such a popular debt solution is that it can fully erase medical debt.
What Kind of Debt is Medical Debt?
Medical debt is an unsecured debt, meaning it does not have any collateral, or personal property, tied to it. In some bankruptcies, unsecured debts can be dismissed without liquidating any collateral. Medical debt is also a non-priority debt, meaning it is usually deemed as “less important” when compared to other debts like child support and tax bills.
Since medical debt is both an unsecured debt and a non-priority debt, it is usually fully dismissed, even without being fully or partially paid. This allows those filing for bankruptcy to be relieved of their medical debts and have a blank slate, so to speak.
When Should I File Bankruptcy on Unpaid Medical Debt?
There are a few reasons that can indicate you should file for bankruptcy. You may want to consider filing for bankruptcy if:
- You are facing wage garnishments.
- You are under a severe amount of financial stress.
- Your medical debt is preventing you from seeking necessary medical attention.
- A debt collection agency is hounding you.
- Your medical debt is severely affecting your credit score.
Filing for personal bankruptcy can feel like a “worst-case scenario option,” but it can actually offer a wide range of benefits, especially when it comes to medical debts. Still, bankruptcy can have some downsides and can stay on your credit report for years, so it should only be pursued if it is truly the best solution to your debt problem. A bankruptcy attorney can help evaluate your financial situation and determine whether or not bankruptcy is right for you.
What Chapter of Bankruptcy is Best for Medical Bills?
When filing for bankruptcy, you normally have two options: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both can have different benefits and downsides, so it’s usually a matter of finding one that will work best for you and your debt situation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is often referred to as “liquidation” bankruptcy, meaning that your assets will most likely be liquidated, or sold for cash, in order to pay off some of your debts. Since creditors are treated differently, secured creditors and unsecured, priority creditors are paid first. Once the liquidated funds run out, the remaining debt is dismissed, leaving you debt-free at the end of the bankruptcy process.
While a Chapter 7 bankruptcy can cause your unpaid medical bills to be dismissed, it may also have additional consequences. For example, suppose you previously owed money to a specific doctor. In that case, they may drop you as a patient and make you find a new healthcare provider after your bankruptcy proceedings. After all, that doctor probably didn’t receive any payment for the services they gave you and may not want to risk missing out on any more payments from you in the future.
Individual healthcare providers can refuse to treat you as a result of filing for bankruptcy, but a hospital cannot deny you treatment because of your bankruptcy status. This ensures that you are able to receive emergency treatment despite any previous medical debt.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy requires you to agree to a payment plan and pay off some of your debts within a 3 to 5-year repayment period. People who file for Chapter 13 usually only do so because they didn’t qualify to file under Chapter 7, or they have enough disposable income to reasonably repay their debts. Developing a debt management plan under Chapter 13 allows you to retain any relationships with your medical providers and can help you retain secured collateral like your car.
How to Dispute Medical Debt
In addition to filing for bankruptcy, you can dispute your medical debt directly with your medical provider or insurance company. An attorney who handles medical bills can also negotiate with healthcare providers on your behalf, investigate bills for inconsistencies, and determine if there was a breach of contract on the hospital or insurance company’s end. A medical billing advocate can also aid in negotiations with your creditor or insurance provider.
With Your Doctor or Hospital
The first thing you should do is review your bills for accuracy. Billing errors happen, but sometimes, they can make the difference between paying the bill in full or having to file for bankruptcy. If the medical billing system double charged you for a service or charged you for a service you did not receive, you can negotiate with your healthcare provider to have those charges removed.
Another way to directly handle your medical debt is by developing a payment plan and negotiating prices with your doctor or hospital. Many hospitals are even willing to provide uninsured patients with discounts or medical rebates through financial assistance programs. If you are suffering from financial hardship, your medical provider may be able to reduce the final cost of your bill–all you have to do is ask.
With Your Insurance Company
Just like hospital billing systems, insurance billing systems can make mistakes, so it’s important to double-check and make sure you are receiving accurate coverage. Additionally, if you can’t afford the amount due on your medical bills, you may want to appeal your insurance claim. Appealing insurance claim denials can help ensure you receive the coverage you deserve and can help you avoid the consequences of being in medical debt.
How to Handle Medical Debt Collectors
If your medical bills are sold to a collections agency, there are a few things you can do to help your debt situation and ensure your credit score doesn’t take a major hit. One of the best things you can do is contact the collection agency to work out a payment plan or potentially negotiate a settlement amount.
You should also make note of the statute of limitations on debt in California, which is the length of time your creditors can pursue payment. The statute of limitations on medical debt is 4 years from the date the bill was issued.
Another thing you should keep an eye on is your credit score. Once your outstanding debt is below $500, the collection agency must contact your credit reporting agency to remove the debt from your credit report.
How Can Medical Debt Affect My Credit?
Unpaid medical debt can negatively affect your credit score, and any debt over $500 can remain on your credit report for up to seven years. Low credit scores can increase mortgage rates or even prevent people from receiving loans, leases, or credit cards. A bankruptcy lawyer or credit counselor can help you better understand how to increase your credit score and have your medical debt removed from your credit report.
Do I Need a Medical Bankruptcy Attorney?
A bankruptcy attorney can help you better understand your debt situation and can help you file for bankruptcy or negotiate with your creditors. If you do decide to file for bankruptcy for your medical bills, a skilled bankruptcy lawyer like the ones at Marshack Hays Wood, can help you through the process and ensure everything is done correctly.
How Can an Experienced Bankruptcy Lawyer Help Me?
The bankruptcy process can be difficult to navigate, especially without legal guidance. A bankruptcy lawyer can help you understand how the bankruptcy process works and what you must do to receive your discharge at the end of your bankruptcy proceedings.
Additionally, they can help you fill out the necessary paperwork and ensure it is done correctly to avoid accidentally committing bankruptcy fraud. Overall, hiring an experienced attorney to help you through your bankruptcy can be crucial to having a successful bankruptcy.
Contact an Orange County Lawyer for Medical Bills at Marshack Hays Wood
If you are struggling with paying off your crushing medical bills, the Orange County bankruptcy attorneys at Marshack Hays Wood are here to help. With over 80 years of collective experience handling bankruptcy cases, you can trust us to help you through the bankruptcy process so that you can have a fresh start. Take the first step towards becoming debt-free by giving us a call at (949) 333-7777 or contacting us online to schedule a consultation with a member of our team.
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At Marshack Hays Wood, our attorneys provide the legal support you need to move forward with confidence. Let us help you take the first step toward financial stability.
