Filing for Bankruptcy After a Hospital Stay

Filing for bankruptcy has traditionally been viewed as a social taboo — a reflection of a lack of responsibility. The truth is that the vast majority of today’s bankruptcy filings are spurred by an inability to pay bills for medical care. Hospitalization and treatment for illnesses quickly deplete savings and climb to levels far beyond what most people can afford, especially if their condition prevents them from earning money. Though filing for bankruptcy after a hospital stay will address the immediate problem, it can also have unintended consequences.

Despite the significant prevalence of medical debt, there is no way to limit a bankruptcy filing to medical-related bills and no asterisk that can be placed on your credit rating to denote that your debt was driven by healthcare needs. The filing will stop harassing collection calls and resolve your bills quickly but will also impact any other debts that you may have – even if you had been easily able to pay them up until the medical crisis. If you file for Chapter 7 you may find yourself at risk of forfeiting assets to satisfy your creditors, and your credit score will reflect your bankruptcy for ten years. This will impact your ability to take out future loans. Even if you file for a Chapter 13 bankruptcy that sets up a payment plan, it will show up on your credit score as a black mark against you.

In addition to impacting your credit, filing for bankruptcy after a hospital stay has the potential for impacting your relationship with your medical provider. Though an emergency room cannot legally turn you away when you need care, any private physician or practice to whom you owe money can certainly refuse to give you an appointment.

For all of the reasons above, people facing high medical bills are encouraged to consider the other options that are available to them, as well as bankruptcy. Many hospitals will agree to payment plans when advised of a patient’s disability, and some will deeply discount their fees or dismiss them entirely when a patient can demonstrate their financial challenges. Your best bet is always to thoroughly explore the options available to you before jumping into a decision to file bankruptcy.

Our experienced bankruptcy attorneys are here to provide you with the assistance you need in the face of medical debt. Contact us today to set up an appointment.