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Being sued for medical debt? Consider filing bankruptcy

On Behalf of | Mar 2, 2018 | Bankruptcy |

Like most Kentucky residents, you know how expensive medical care can be these days, and having insurance doesn’t always make it better. Rising premiums and high deductibles make most people avoid going to the doctor for what they consider minor health issues and injuries.

Then, you experienced a sudden and serious injury or illness. You probably had no choice but to seek medical attention. By the time you left the hospital, you already owed thousands of dollars — even with insurance. Any follow up care you required only added to the ever-growing pile of medical bills in your mailbox. Unable to pay them, you ended up being sued for payment.

You aren’t alone

If you needed medical treatment for which you now find yourself unable to pay, you are in good company. Nearly 10 million people across the country end up in the same situation every year. Approximately 25 percent of American families struggle financially due to medical debt. As it turns out, the primary reason many people file bankruptcy is because of medical bills.

You can’t bury your head in the sand

As much as you would like to, you can’t simply ignore a lawsuit. If you fail to respond, the entity or person filing it wins by default. This means that the court awards a judgment against you that can then be collected through numerous means such as garnishments and liens.

Instead, make use of local legal resources to understand your rights and know your options. Find out exactly what debt you owe, where it originated and who is attempting to collect it. It’s possible that you don’t legally owe the debt for some reason, and if the court agrees with you, the lawsuit goes away. However, if you do owe the debt, you may need to consider other options.

You may be able to file bankruptcy

Filing for bankruptcy can stop a pending lawsuit for medical debt in its tracks. This is due to an automatic stay that goes into effect upon filing. In fact, the automatic stay essentially freezes everything at a certain point in time (when you filed) until the court can determine whether you qualify for a discharge of certain debts, including your medical bills.

The bad press that bankruptcy has received in the past is just that — a story. The bankruptcy system exists to help people who need a fresh start in order to get their financial houses in order. In a successful bankruptcy, you are relieved of responsibility for payment of certain debts, which eliminates liens, levies and garnishments, along with lawsuit if your medical debt is discharged.