Helping With Your Financial Future

Medical creditors are notorious for aggressive debt collection efforts

On Behalf of | Apr 20, 2024 | Consumer Bankruptcy

People who have gone through medical hardship often expect that healthcare providers should treat them with dignity and patience. After all, a hospital that has – for example – provided cancer treatment should be fully aware of the current limitations affecting a particular patient.

An individual who has just achieved remission may have gone months without income because they were unable to work after their cancer diagnosis. They may have tens or even hundreds of thousands of dollars in outstanding medical debts. Even those with decent insurance coverage may find that coinsurance, large deductibles and uncovered treatments saddle them with huge medical debts. While people may expect medical creditors to be compassionate and understanding, the reality is that medical creditors are often among the most aggressive.

Even nonprofit hospitals take legal action against patients

Many medical institutions are for-profit organizations. They are businesses focused on generating revenue for shareholders. They must therefore keep costs as low as possible while obtaining as much revenue as is realistic.

Compelling patients to pay for care is there for a priority for many medical businesses. In recent decades, many hospitals have begun regularly selling debts to collection agencies with reputations for aggressive practices. Some hospitals even have large internal collection departments that engage in efforts to speed up repayment by patients who owe money.

It is common practice now for hospitals to take legal action if patients fall behind on their payment arrangements. Hospitals and other healthcare providers might initiate lawsuits to place a lien against someone’s potential recovery in a personal injury case or against the home where they live. Even nonprofit medical facilities have begun embracing these aggressive practices that may affect the finances and health of someone who just underwent extensive treatment.

Bankruptcy can help resolve medical debt

Once creditors have successfully taken legal action, individuals may have to worry about wage garnishment or even the loss of their most valuable assets. Therefore, responding assertively to a creditor lawsuit is often an important step for those struggling with debts caused by recent medical challenges.

Someone’s bankruptcy filing can lead to a dismissal of pending lawsuits until the courts resolve the bankruptcy case. Many medical debts are eligible for discharge in a personal bankruptcy filing, provided that the filer includes the debts in their bankruptcy paperwork. A successful bankruptcy case can absolve someone of the legal obligation to repay overwhelming medical debt and can prevent medical creditors from engaging in aggressive and harmful collection activity.

Realizing that a bankruptcy filing may be the best option could benefit those struggling with overwhelming medical debt. A discharge can help people regain control over their finances after a health issue saddles them with massive financial obligations.