Some of the most heartbreaking bankruptcy cases we see at our firm are the result of people being overwhelmed financially by enormous medical bills relating to accidents and/or long-term illness.
Keep in mind, when you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into effect that prevents collection attempts. Additionally, when you file for Chapter 7 bankruptcy, you can discharge medical bills and credit card debt.
In addition, through a Chapter 13 bankruptcy, you can greatly reduce medical debt through a payment plan.
Unfortunately, because of a mixture of the poor economy, insurance issues and high fees, people are becoming more likely to file for bankruptcy following a serious medical event.
Recently, Reuters had a distressing story about this phenomenon. The story detailed how Megan Rothbauer, a Wisconsin resident, was sent to the wrong emergency room (one outside of her health insurance network) last year, after she collapsed at work.
Rothbauer spent 10 days in the hospital, as she was placed in a medically induced coma, spending time in the cardiac unit. “I was in a coma. I couldn’t very well say, ‘Hey, take me to the next hospital,” Rothbauer told WSIC-TV.
Unfortunately, Rothbauer was sent to St. Mary’s Hospital by first responders, which was out of her insurance network, instead of to Meriter Hospital, only three blocks away. The mistake resulted in more than $50,000 in medical bills, rather than the $1,500 maximum out-of-pocket expense covered by her insurance.
Now, Rothbauer is contemplating bankruptcy as a way to escape the debt.
Should I Talk to a Bankruptcy Attorney About My Medical Bills?
Keep in mind, to obtain a discharge through Chapter 7 bankruptcy, a person may not have had his or her debts discharged within the past eight years. Debts eligible through discharge include unsecured debts, such as medical bills and credit card debt.
If medical bills are overwhelming you, contact our Washington DC and Maryland bankruptcy lawyer today for a consultation. It is sad that so many people in our country are struggling financially because of unexpected medical debt.
Medical debt is treated as a nonpriority unsecured debt in Chapter 7 bankruptcy. If you are able to pass the means test, you may be able to eliminate medical debts. For more information, call our office today.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: A 2013 study found that unpaid medical bills resulted in about 2 million American bankruptcy cases each year.