Are You Unable To Pay Your High Hospital Bills? Here's How To Know If Filing For Chapter 7 Bankruptcy Is The Right Option

Posted on: 14 July 2022


If you've received a bill after your hospital stay and are unable to make payments on it, you may have wondered if filing for bankruptcy is the best option. Filing for Chapter 7 bankruptcy will discharge most debts, including hospital bills. You won't have to pay it, and the hospital won't be able to take legal action against you like garnishing your wages. Read on for more information on how to know if Chapter 7 bankruptcy is the right option to eliminate your high hospital bill. 

Have You Tried Negotiating With the Hospital?

Many people are unaware that they're able to negotiate with hospital staff about their bills. If you've received a large bill in the mail from your hospital stay and wondering how you'll ever be able to repay it, calling the hospital and negotiating should be your first step.

You can ask the hospital for an itemized bill of the services you received during the hospital stay. Sometimes hospitals make billing errors, and you'll be charged for procedures that never happened or get double charged for your procedure. You can ask the hospital to remove these errors from your bill in order to reduce it.

After checking the bill for accuracy, ask the hospital's patient billing services department about their payment plan options. You may be able to stretch out your payments over many years in order to make the monthly payments affordable.

If the payments are still too high, ask to speak to the hospital's financial aid counselor. You'll need to provide them with information about your income. If you don't make enough money to ever have a chance of paying your hospital bill, the financial aid counselor may convert it to charity care, and this will substantially lower the amount you'll have to pay.

Do You Have High-Value Assets That You Need to Protect?

When you file for Chapter 7 bankruptcy, your creditors (including the hospital) will seize all of your unexempt assets and sell them in order to recoup some money for your debt. Exempt assets are things that you need to survive, like your clothes, house, and car. Unexempt assets are things like a boat, second home, second car, or jewelry.

If you have high-value unexempt assets that would be seized and sold by your creditors, you may want to avoid Chapter 7 bankruptcy so that you can keep them. However, it's more common for people considering Chapter 7 bankruptcy to own very little in terms of unexempt assets that can be seized, and in this case, it's a good choice.

Do You Expect to Need More Care in the Future?

One downside of Chapter 7 bankruptcy is that you can't file it too often. According to the United State Department of Justice's fact sheet about Chapter 7 bankruptcy, you can only file for Chapter 7 bankruptcy every eight years. If you file for bankruptcy in order to discharge your hospital bills and need more hospital care in the future, you won't be able to discharge your bills again until the eight years are up. Future bills may be sent to collections, and you also may face legal action.

While it's difficult to predict your health care needs in the future, you may want to seek an alternative option if you have a chronic health condition, like congestive heart failure or chronic obstructive pulmonary disease, that can lead to frequent hospitalizations. If your hospital stay was due to a one-off event, like a motor vehicle accident, however, then Chapter 7 bankruptcy is an excellent option to discharge your hospital bills.

If you have hospital bills that you can't pay, contact a Chapter 7 bankruptcy attorney in your area and ask for a consultation. You'll be able to go over your situation in detail to determine if bankruptcy is the right option for you. It's important to schedule a consultation as soon as you can once you start receiving bills in the mail since the hospital may decide to sue you in civil court to collect your debt if you're not making payments on it; filing for Chapter 7 bankruptcy will prevent that from happening.

Contact a local bankruptcy lawyer, such as Alan G. Seligson PC, to learn more.