As Orange County bankruptcy lawyers, we see a substantial number of clients who come to us after medical problems put them in an overwhelming amount of debt to hospitals, doctors and other medical providers. In fact, according to a 2005 study by Harvard University, medical debt is responsible for more than half of all bankruptcies. Disturbingly, many of the people in the study did have health insurance -- just not enough to cover the full extent of their illnesses.
For people with a serious illness, chronic health condition or catastrophic injury, medical bills can add up very fast. An emergency-room visit after a car accident, for example, can quickly reach five or six figures if there was a serious injury involved. At Howard Law, we understand all too well that being in debt can feel so overwhelming that many people simply shut it out. But people with medical debt they know they can't pay still have options to consider.
First of all, if you're being harassed by creditors, you should know that you have rights. Under the Fair Debt Collection Practices Act, you have the right to request that creditors and bill collectors stop calling you and that they verify your debt in writing -- among many other things. If they ignore your requests, you have the right to sue them for up to $1,000 per violation (plus attorney fees and sometimes more), so it's best to make your request in writing and send it by certified letter. Howard Law has successfully represented many clients in Southern California debtors' rights lawsuits.
If your bills haven't been sent to collection agencies yet, you may be able to strike a deal with the original medical organization. Hospitals may not be eager to say so, but many have programs allowing forgiveness of debt for people who meet certain income qualifications -- generally those who make around 400% of the federal poverty line. If you don't qualify, they should still offer the option of setting up a payment plan. Smaller medical groups and individual doctors may also be willing to do these things. You'll probably have to show them documents that prove your income, like tax returns and pay stubs.
If your bills are in the hands of debt collectors, you probably can't ask for complete forgiveness, but you might still be able to set up a payment plan. If you have extra money, you may also be able to strike a settlement agreement, in which they drop the case entirely in exchange for a partial payment. Again, it's extremely important that you document every exchange you have with collection agencies, so you can prove you had a deal if things go sour later.
Unfortunately, many debt collectors are hostile and aggressive, and a few cross the line into illegal and unethical behavior. Clients already struggling with financial problems often find dealing with them very difficult. Howard Law has an active debt settlement and debt negotiation practice, in which we negotiate with creditors on our clients' behalf for a fair and complete settlement.
Bankruptcy is not most people's favorite option, but it might be right for those who can't resolve their financial problems in other ways. Depending on the type of bankruptcy you choose, your debt may simply be forgiven by a judge, or you may be asked to pay off a reduced amount in a way that allows you to support yourself. At Howard Law, our Buena Park bankruptcy attorneys can give you more information on whether bankruptcy is right for you. To set up a free consultation, contact us online today or call 1-800-872-5925.