Dear Bill,
I understand your worries, but hopefully after reading this article, I think you will be able to sleep better, knowing that there are helpful options for you and the hospital debt.
First, please understand that the law protects certain income and assets from collection for unsecured debt. Medical debt is unsecured, meaning there is no collateral tied to it. The only remedies for a creditor to use to deal with an unpaid unsecured debt is to negotiate a payment plan, or sue you and get a judgment against you. The law protects Social Security retirement benefits from collection for judgments, especially if the benefits were directly deposited into the bank. In general, if your income comes from government benefits, there’s a good chance that they are protected. Further, if you are employed and earn a wage, wages are protected in two ways: up to $290/week net are protected, and up to all of the wages are if you also get government benefits based on need. So, you can see that just because you owe money, your income may be protected from collection, giving you an opportunity to negotiate or to let it go unpaid.
Second, if the debt is from a hospital, there is a good chance that the hospital is a party to a “hospital agreement” with the Minnesota Attorney General’s office. If so, the hospital has agreed to work with debtors to find an affordable payment plan and not to use harassing collection techniques. Because your debt is a hospital debt, you should contact the hospital and ask to speak to someone in the Financial Assistance department and ask for an application. This is often the first step to getting the debt into an affordable payment plan or forgiven altogether.
Please note: Even if you owe a hospital money, under federal law, the hospital cannot refuse to treat you in an emergency situation. They have to stabilize you, then they can transfer you to a different hospital for the non-emergency treatment. Because a lot of people are loyal to their community hospital, and want to be treated there in non-emergency situations, the best option is to make use of the hospital agreement’s affordable payment plan.
Finally, if you have a lot of other debt, you can file for bankruptcy. Bankruptcy does cost money, so in order for it to be worthwhile, you should have at least more than the cost of the bankruptcy. Bankruptcy, if successful, will wipe out the debt so that creditors don’t continue to try to collect it. In my opinion, do not try to do a bankruptcy on your own – get individualized advice to see if it is a good option for you.
