I am drowning in medical bills. Help?

If you are overwhelmed with medical expenses, you are not alone. I read an article recently where it stated that medical bills and accounts now represent over 50% of debt classified as being in collections status.   That’s huge!  According to the Federal Reserve, the government agency that keeps up with these things about 1 in 6 credit reports have medical debt collection accounts listed.  About 40% of these credit reports were also experiencing a lower credit score and the majority of these debts were listed as still unpaid.

There are two major issues.  One – people are struggling with the amount of medical debt that they are in – there isn’t a payment plan out there that would be feasible for them to attempt.   And two – people are struggling with somewhat manageable medical debt but the medical collections community seems to have absolutely NO desire to work with them on any type of reasonable payment plan.

I met with a couple the other day that make good money and had health insurance.  The husband recently had to undergo surgery and the bills were steadily coming in from the doctors, labs, and the hospital – but overall it wasn’t too bad.  The problem is that they all wanted their money immediately.  Pay or be sent to collections in 30 days. Pay the debt collector or be sued.  Be sued and be garnished or have your bank account frozen.

If you have experienced a major medical crisis, you know that the bills come in from everywhere!  Twenty different bills, from $100-$500, it all adds up! Fortunately for this couple, their hospital bill was only $1,300 (their portion), but the hospital wanted it all tomorrow.  They started sending everyone $10 to $20 a month each along with $100 a month to the hospital to try to get a handle on this, but now they are being sued and facing garnishment by one of the providers and being threatened to be sued from all others. The lawsuit has added collection fees, attorney fees, interest, and court costs, which has turned what was once a small debt and doubled or tripled it.

Since the couple filled out forms for the medical providers, they all know where the husband is employed and where to send the garnishment. Since the couple was sending the small payment checks each month, now the debt collectors know which bank they use. So trying to do the right thing, they gave the debt collectors all the information the debt collectors need to come after the husband.

It’s crazy, but what many people don’t understand is that the medical providers are NOT obligated to accept what you can afford (an exception being some non-profit hospitals which may have to offer some financial assistance).  As harsh as it is – they can push for payment now and turn over the debt to collections at any time, even if you are mailing in payments.

It’s estimated that medical debt is the driving force behind 60% of bankruptcy cases in the United States. Not only does the overall amount of medical debt force people to file bankruptcy, but the debt collectors’ attitude of “we don’t care what your situation is” and “stop paying everything else and pay us” makes it impossible to work with them.  There just aren’t really any other consumer protection laws (other than bankruptcy) to address the specific issues surrounding medical debt collection specifically that would eliminate some of the harsh practices that we’ve discussed.

Bankruptcy is a consumer protection law. It is the strongest set of consumer protection laws available to fix your financial problems.  Not only will it eliminate the medical debt, it will address your ENTIRE financial situation to ensure you receive a new beginning and a fresh start.   So let’s get together and have a strategy session to decide on the best plan of attack for you and your current situation.   We can stop the debt collector calls and harassment, the lawsuits, garnishments, and get things back under your control.