Medical Bills

Did you know that medical bills are one of the leading causes of financial distress in Seattle and across Washington State? A sudden illness, accident, or unexpected procedure can leave you with thousands of dollars in crippling debt. Even with health insurance, high deductibles and out-of-pocket costs can quickly become overwhelming.

If you’re struggling with medical debt, you aren’t alone. Bankruptcy laws provide you with options to help you manage or eliminate these debts and regain financial stability. This is where our Seattle bankruptcy attorneys, with years of experience, can step in and help.

Common Mistakes to Avoid When Dealing With Medical Bills in Seattle

• Ignoring Medical Bills: While ignoring medical debt might seem like a good idea initially, it can lead to some major consequences in the long run. Unpaid bills sent to collections can damage your credit score and possibly lead to legal action against you.
• Not Negotiating With Medical Providers: Many people don’t realize that medical providers may actually be open to negotiating your medical bills. If you are hit with large medical debt, it is worth contacting the provider to discuss payment plans, discounts, or even reductions. Hospitals and doctors’ offices may even offer financial assistance programs, especially for lower-income patients.
• Failing to Check for Billing Errors: Medical billing errors are common. Incorrect charges or mistakes in coding can inflate your bills, so always review your bills carefully. Dispute errors right away.
• Not Exploring Financial Assistance: Hospitals and clinics often offer financial assistance programs or charities that can help reduce your medical debt.
• Taking Out High-Interest Loans to Pay Medical Bills: While it might seem like a quick fix, using high-interest loans, credit cards, or payday loans to cover medical bills can put you in a much worse financial position.
• Paying Only the Minimum or Making Partial Payments: While making partial payments may seem like a good idea to handle your medical debt, it can lead to higher interest and fees over time. In many cases, it would be best to negotiate a better payment plan or look into bankruptcy options if the debt becomes too overwhelming.
• Not Understanding the Long-Term Effects of Medical Debt: Medical debt can have serious, long-standing consequences, especially if you fail to manage it properly. Aside from hurting your credit score, unpaid medical bills can lead to wage garnishment, lawsuits, and property liens.

Medical Debt and Bankruptcy

Can medical debt be discharged in bankruptcy? Yes, medical debt is considered an unsecured debt, meaning it can be discharged through bankruptcy. If you are considering filing in Seattle, there are two main bankruptcy types to keep in mind.

• Chapter 7 Bankruptcy: This bankruptcy type eliminates most unsecured debts, including medical bills. If you qualify under the Washington State Means Test, your medical debt can be completely wiped out and give you the fresh start you need.
• Chapter 13 Bankruptcy: This bankruptcy option lets you create a three-to-five-year structured repayment plan under 11 U.S.C. § 1322. Your medical debt can be included in this plan and often at a reduced rate as well.

Washington Laws and Considerations for Medical Debt in Seattle

As a Seattle resident, you must consider some state-specific factors before filing for bankruptcy.

• Washington State Exemptions: You can use federal bankruptcy exemptions in Washington, but there are also state exemptions that may be beneficial. Under RCW 6.15.010, certain personal assets, including some wages and home equity, may be protected.
• King County Filing Process: If you live in Seattle, you will file for bankruptcy in the US Bankruptcy Court for the Western District of Washington; they serve King County.
• Medical Liens: In some cases, a hospital may have placed a lien on your home for unpaid medical bills. Filing for bankruptcy can help remove the liens in certain circumstances under 11 U.S.C. § 522(f).

Frequently Asked Questions About Medical Bills in Seattle
How a Seattle Bankruptcy Attorney Can Help With Medical Bills

You don’t have to face bankruptcy and mounting medical bills alone. Reach out to an experienced Seattle bankruptcy attorney who can use their years of experience to help you get a favorable outcome. How can we help?

• Determine Eligibility: A bankruptcy attorney in Seattle can review your financial situation and determine which type of bankruptcy you qualify for.
• Protect Your Rights: Because creditors often use aggressive collection tactics, your attorney can help ensure that all of your legal protections under the Fair Debt Collection Practices Act (15 U.S.C. § 1692) are upheld.
• Maximize Debt Relief: An experienced attorney can help you navigate your exemptions and ensure you get the most out of your bankruptcy filing.

Don’t hesitate to reach out to our Seattle bankruptcy attorneys today so you can start taking more positive steps toward building back your financial stability.

There are many ways medical bills can quickly put you over your head in debt. In fact, medical debt is one of the leading forms of bankruptcy. Among the ways medical debt can leave you drowning in debt before you know it include the following:  drastically increased hospital bills and health insurance premiums; retirees underestimating their health care expenses;  lack of children’s health insurance;  keeping up with health insurance while unemployed, and loss of work while sick or injured.

Fortunately, medical bills are easy to wipe out in bankruptcy. They are a class of debt in bankruptcy knows as “general unsecured debt” because they are not backed up by property and they are not the sort of priority debt that is not discharged. Though it is very rare, some general unsecured creditors may challenge a bankruptcy, usually by claiming fraud. However, this is basically unheard of for medical debt.

One issue to be aware of with medical debt is that a trustee may suspect that high medical debt is a result of an injury for which you may be able to recover money in a lawsuit. If this is the case, the potential recovery would be an asset in your case even if you have not filed the lawsuit yet. It is important to let your bankruptcy attorney know if you think you can sue someone for medical debt, because much of this recovery can be claimed as exempt so your creditors cannot touch it.

You may wonder if a doctor will stop treating you if you wipe out a debt you owe him or her. Though this is possible, it is rare. You may wish to discuss your bankruptcy with your doctor before filing. Don’t pay off a large medical bill right before you file, because any payment over $600 made to a creditor within 90 days of filing can be undone by the trustee. That means that your doctor could be sued by the trustee to recover the money so it can be spread around fairly to all your unsecured creditors.

Timing is important when filing bankruptcy if you have ongoing medical problems. If you think you may have to undergo expensive medical procedures in the future that may not be covered by insurance, you should wait to file your case. Remember, you can only file one Chapter 7 every eight years.

If you're struggling with overwhelming medical debt, we can help. Call us today or request an appointment to learn how our experienced Seattle, WA bankruptcy attorneys can guide you through this difficult time.