How Bankruptcy Can Help Conquer Your Medical Debt


Hi, I'm Matt McArthur, bankruptcy attorney at Clear Counsel Law Group. Today I want to speak a little bit about medical debt and specifically using bankruptcy as a vehicle for dealing with overwhelming medical debt. This is common type of debt that we come across.

There's been a lot of significant changes to healthcare laws recently and a lot of people are left a little confused about their situation and oftentimes, they come across a situation where they owe a lot more to the medical providers and services than they would have normally expected.


Is Bankruptcy a Good Option?

The first question we need to address is, is bankruptcy a good option for dealing with medical debt. Generally speaking, this can be answered in a way that can be applied to any type of debt.

If the debt is at a level where it's high enough to where it makes sense to file for bankruptcy then, yes, bankruptcy can definitely wipe out medical debt and be an effective means for eliminating any financial responsibility of the person that owes the debt.

Now, there are some pitfalls that you need to worry about with dealing with medical debt, specifically in filing bankruptcy to eliminate the medical debt.


Good Things to Know about Medical Debt

One of the most common things that I come across when a person has had significant medical services provided to them, is that they are unsure of who is owed money and how much money is owed. What we do, typically, when we get ready to file bankruptcy for an individual is we will run a credit report that pulls from the three different reporting bureaus.

Any debts that are currently being reported to the reporting bureaus will show up on that report. We have a way of knowing who is owed the money and is actually reporting to the credit reporting bureaus.


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Now, the shortfall with that method is that we can only pick up or find out about debts that are currently being reported to the credit reporting bureaus. This means that you have a creditor that is actually owed money but for some reason isn't reporting to the credit reporting bureaus, that's not going to show up on a credit report.

An attorney getting ready to prepare bankruptcy paperwork to file a case for you, isn't going to know about that creditor unless you have some other form of documentation to show the attorney.

That's why it's really important if you are facing an enormous amount of medical debt and it's coming from a number of different sources, to save any bills that are coming in the mail so that those bills can be cross-referenced with the credit report to ensure that everybody is being listed in the bankruptcy, the debt is going to be eliminated, and all proper parties are going to receive notice of your bankruptcy.


An Example Through an ER Trip

Now, another issue that you need to be aware of when filing for bankruptcy and trying to list all of your creditors is that one trip to an emergency room could result in a number of different types of bills. The bills could be from the hospital itself, it could from the treating physician, it could be from the lab company that the ... Any labs that are sent off for during your visit, it could be from an anesthesiologist, a different type of doctor, there's a whole range of potential medical service providers that are going to be sending you bills and wanting to be paid.

Just because you only went to the emergency one room, doesn't mean there's only going to be one bill. You need to be on the lookout for multiple bills from multiple sources.

Save those bills and make sure that you provide those bills to your attorney before filing for bankruptcy so that we can make sure that if you're filing for bankruptcy you're getting the full benefit of the bankruptcy and all parties are being noticed, all debts are being eliminated.

If you have any questions about this, please come and see me, Matt McArthur, bankruptcy attorney at Clear Counsel Law Group, and I'd be happy to discuss this with you on your path towards a fresh start.


Clear Counsel Law group

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