Should I File for Bankruptcy for Medical Bills?

Can I file for bankruptcy on medical bills?

A story involving a $17,000 post-surgery drug test has made headlines across the country. The story involves a 30-year-old Texas State University student who was billed $17,000 after she took a drug test to show that she was not abusing her pain medication. According to the woman, the laboratory that conducted the testing was out-of-network and billed her excessively for the services she received.

Out-of-network hospital bills have become a major financial problem for millions of Americans. Even in cases where you do have insurance and select a hospital that is covered by your insurance, certain specialists or employees may not be covered. You could be stuck paying the remainder of what your insurance will not cover, if it covers anything at all.

Many people have filed for bankruptcy to discharge medical bills. Whether you should file for bankruptcy on your medical bills would depend on the circumstances. You could still negotiate with the hospital or insurance provider if you only recently received medical bills. In addition, you could see if you qualify for financial assistance that may help cover the debts. Creditors may also be willing to negotiate a reduced lump sum payment.

If you fall behind on your medical bills, the medical service provider could seek a judgment to garnish your wages. New Jersey law allows creditors to take up to 10 to 25 percent of your income, depending on how much you earn. Wage garnishments can cause you to default on other bills, such as your student loans or mortgage.

How Can Bankruptcy Help with Medical Bills?

There are several ways filing for bankruptcy could ease the pain caused by unaffordable medical bills. Creditors must cease collection attempts after you have filed. This means that bankruptcy’s automatic stay can stop a wage garnishment. In addition, medical bills can be discharged in bankruptcy. You would no longer be liable for the debt after your bankruptcy case concluded.

The New Jersey bankruptcy lawyers at Garland & Mason, L.L.C could help you determine whether bankruptcy is a good option for your situation. For more information, you may call us or describe your situation by using our online case review form.

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