Here are a few things you should know about medical bills and bankruptcy.
First, it can happen to anybody. You now know that. But even though there probably wasn't any way to prevent it, the co-pays won't go away on their own. What will you do about them?
Unpaid medical bills accrue interest and penalties, and collection efforts are every bit as aggressive as with other types of debt. Medical debt is quickly placed in the hands of bill collectors and collection lawyers, just like credit card debt. The phone calls and demand letters will begin. Ignore them and you will get sued. In our small state, Connecticut, there are around 14,000 lawsuits a year to collect medical debt! Eventually, your wages and property will be attached.
Now the good news. Although medical services are essential, such debt enjoys no special treatment in bankruptcy. Until such debt becomes a lien it is a general unsecured debt which can be discharged in a personal bankruptcy.
Of course you are reluctant. The service you received was special, maybe life-saving. Everyone gets that. But problems with health care costs go beyond you. It is pointless to consign your future, and your family's, to a debt you cannot afford to pay when bankruptcy may provide a straightforward solution.
I also understand that there may be physician relationships you would like to preserve. Sometimes people think that you can pick and choose which individual creditors to subject to your bankruptcy. It doesn't work that way. However, bankruptcy law does allow you to pay individual debts of your choosing, even after your legal obligation to do so is discharged. So, there may be ways to preserve a doctor-patient relationship.
If you would like more information about your bankruptcy options I would be happy to meet with you. Please contact me for a free consultation.