Filing Bankruptcy on Medical Bills

When most people think of bankruptcy, credit card debt and mortgage foreclosures are likely what come to mind. However, recent studies show that more than 60% of bankruptcy filings are related to medical bills and not all of the individuals racked with outstanding medical bills are uninsured. Even those who have good health insurance have outstanding balances for procedures and care not being covered by insurance.

Avoiding Bankruptcy

Financial experts recommend that consumers use bankruptcy only as the very last resort to get out from under debt. The process of filing bankruptcy is not an easy one. There are high expenses involved and the process is very time-intensive to the consumer. Additionally, bankruptcy is not a sure thing. Many creditors in a bankruptcy filing will not agree to discharge all debts. Consumers are urged to seek alternative solutions when it comes to medical debts.

What to Do If Medical Bills Are Due

Review Your Bills

It is not uncommon for patients to discover billing errors from a hospital stay or medical procedures. If you are not reviewing your billing statements closely, you may find that mistakes on the part of the medical care provider can total hundreds or thousands of dollars in your favor. Providers should make itemized statements available for your review. Pay attention to what tests and procedures you are having completed and discuss with the healthcare provider at the time of the treatment what is being done and how much it will cost. If, after you have reviewed each item on your bill and you have questions or concerns, contact the billing office immediately to get the matter cleared. Even if you are behind on payments currently, you still have time to go over your billing statements if you haven't done so before.

Make Payment Plans Through the Provider

Medical bills can cause larger problems if you choose to pay for them with a credit card or through a personal loan. Never use a home equity loan to cover medical bills because defaulting on this type of loan can result in your losing your home. If you are unable to make the payment in full, speak with your healthcare provider and make reasonable payment arrangements you can commit to each month until the debt is paid off. The majority of providers will work with you until the debt is paid off. If you ignore requests for payments or fail to make reasonable efforts to pay on the debts, the provider may send your account to a collection agent, which can result in various collection efforts and potentially harassing correspondence.

Seek Health Insurance

Many medical bills become a debt problem because a person is uninsured or under-insured. If you find it difficult to keep up with medical expenses, you will need to ensure that you have proper insurance coverage. During times of debt, it may seem as if you can not afford health coverage, but as history clearly shows, you can't afford to not have good and adequate health insurance coverage. If you are not covered by insurance due to job loss or other financial hardships, there are several federal and state programs that consumers may be eligible to receive. If you do not qualify for these programs, then you may need to re-work your budget to be able to include insurance coverage.