Medical Debt
Medical debt can lead to bankruptcy.
Medical debt can mean joint debt.
When people think about the debt listed on their credit reports and how the debt is affecting their credit scores, most are probably thinking of credit card debt.
However, medical debt is a huge issue for people trying to make ends meet. Medical debt is not immediately reported on credit reports, until it has been delinquent by at least a few months.
Process:
- Medical debt is usually turned over by the medical provider to an outside collection agency once the debt is a few months past due.
- The collection agency will then report the debt to credit reporting agencies.
- Once the medical debt is reported as a collections account it will likely stay on the credit report for the next 7 years.
- Even if the medical debt is eventually paid in full, the collection may stay on the credit report causing problems when you try to finance a car at a reasonable interest rate or take advantage of low mortgage rates.
- If NOT paid, medical debt is commonly referred to attorneys to seek a judgment in the Limited Actions division of the local county courthouse.
- Once the medical provider receives a judgment they are able to pursue collection by garnishment of wages or bank accounts. A garnishment of a debtor’s wages can cause the debtor to become delinquent on their rent, mortgage, car loans, or other secured debt.
Medical debt presents a unique situation for married debtors.
Kansas and some other states follow the Doctrine of Necessities which extends liability to both spouses on medical debt incurred during the marriage.
For example, say wife needs surgery; husband will be just as responsible for the costs of the surgery not covered by insurance as his wife. Many times unexpected, major medical procedures can turn a household’s finances upside.
Medical debt is dischargeable in a chapter 7 bankruptcy and chapter 13 bankruptcy.
You can discharge your medical debt, credit card debt, payday loans — all in one case.
If you find yourself struggling with medical debt and need a change contact us.