Can I Include Medical Debts in a New York Bankruptcy?

A surprising number of people are uncertain about whether or not they can include medical debts in their bankruptcies. The truth is, medical debt remains the number one cause of bankruptcy.

Once upon a time the medical industry would generally work with people who were having problems. They’d set up reasonable payment plans, or find ways to take you through charity programs, or would recommend the debt collectors they hired come at you with a soft touch.

While some medical establishments are still approaching things this way, others are getting far more aggressive. Even during the pandemic, this has not stopped.

“In a few cases, hospitals have brought new cases against former patients in recent weeks, such as in Wisconsin, where Froedtert Hospital in Milwaukee filed 46 small-claims lawsuits even after the governor declared a state of emergency on March 12, and other hospital systems in the state filed dozens more.” –Pro Publica

These lawsuits come with wage garnishments, collection agents seizing funds from bank accounts, or liens on real property. 

This is timelier than ever, as Covid-19 treatment can cost over a million dollars. That’s a bill most Americans couldn’t pay even if they’ve done everything else right and have experienced no other hardships or setbacks. For some people, of course, even a $500 medical bill is enough to send them into a financial tailspin, especially right now, when the economy is so shaky.

Fortunately, this kind of problem is where bankruptcy excels at riding to the rescue. The automatic stay will put a stop to lawsuits and their associated consequences. If you’re already being garnished for medical debts the automatic stay can put an end to that process as well.

By the way, doctors and emergency rooms cannot stop seeing you just because you’ve filed for bankruptcy. The emergency room, urgent care, and ambulance services cannot refuse service on the basis of your bankruptcy.

Your family doctor can, but doctors rarely do. At worst, you’ll have to find a new doctor, and the new doctor won’t have any way to find out about your bankruptcy. 

If you’re in trouble with medical debt, be realistic about whether you will ever be able to address that debt given your income and circumstances. At a certain point the amount of money you owe is likely to just be too much.

Not sure? Take advantage of one of our free consultations. We’ll take a good look at your personal situation and let you know whether it makes sense to file bankruptcy.

See also:

Are You Waiting Too Long to File Your Orange County Bankruptcy?

Expect Debt Collectors in Orange County to Get More Aggressive as the Pandemic Rages On

The Financial Realities of Covid-19



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