Medical debt remains the leading cause of bankruptcy in America. Thousands of patients at University of Virginia Health Systems (UVA) have seen the devastating consequences of past due medical debt.
Over the course of six years ending in June 2018, the University of Virginia Health System sued former patients over 36,000 times for a sum of over $106 million. The hospital has seized wages and bank accounts of former patients and have put liens on homes and property. This information comes from a Kaiser Health News study, which reviewed UVA Health System’s court records, hospital files, and interviewed hospital officials, as well as former patients.
They found that UVA would pursue a legal action for collection on a debt in the amount as little as $13.91. Some of the larger collection cases were upwards to $1 million owed to UVA. This fact changed in July 2017 when UVA was restricted to pursuing claims only for former patients owing more than $1,000 in unpaid medical debt.
When it came to who UVA sued, they did not discriminate. They sued approximately 100 of their own employees who were also patients. Many of these lawsuits resulted in garnishment, and UVA taking a large chunk of their paychecks. UVA was also able to collect patient tax refunds. UVA also requested reimbursement for legal fees for having to pursue collection actions.
Many hospitals will work with patients for financial assistance to pay for their medical bills, but UVA was reported as having the most restrictive guidelines for allowing patients to receive help in paying their medical debt. This fact made payment even more impossible for many of the patients who found themselves on the receiving end of a lawsuit.
When compared to other hospitals, it is evident that UVA goes above and beyond to collect on their debts. Johns Hopkins Hospital reportedly sues 240 patients annually on average since 2009. In comparison, UVA sues around 6,000 individuals annually.
The reasons that patients are not able to pay their UVA bills vary. Many are either uninsured or underinsured. Some have high-deductible insurance plans, which require them to pay all expenses up to a certain amount before coverage begins. Many are simply financially unable to handle a major medical crisis when it hits.
Many of these former patients are seeking bankruptcy protection. as their only way out. With medical debt being unsecured and easily discharged, bankruptcy is a viable option for consumers struggling with past due medical debt.
How is Medical Debt Handled in Bankruptcy?
In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing. Making the decision to file for bankruptcy is never an easy one. It can be difficult to get past some of the myths associated with filing for bankruptcy. Sometimes by waiting, an individual facing a lot of debt can find himself or herself in an even worse situation. Filing for bankruptcy can help protect valuable assets, including your home, car, IRA and social security. It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.
Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
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