In the last several weeks, we have written about the burden medical bills can place on individuals and families. One of the main reasons 64 million Americans struggled to pay medical bills in 2014 is because the cost of healthcare has remained high. A TransUnion Healthcare report released several months ago claims that out-of-pocket costs for patients rose by 11 percent in 2014.
After leaving the emergency room, some people might owe several thousand dollars before insurance covers additional healthcare costs. Many customers are unable to pay these bills on time, and they might face unforeseen consequences.
So what are the consequences of unpaid medical debt? There are many – poor credit, collection agency calls and potentially legal action. Debtors might find it difficult to rent an apartment, receive a loan for a car or mortgage for a house. In some cases, the debt might be so expensive that collection agencies will seek wage garnishments, taking a large portion of monthly income.
Are Wage Garnishments Common for Unpaid Medical Bills?
A study of America’s largest payroll provider, ADP, shows that wage garnishments are highest in the Midwest. According to the study, about 5 percent of wage earners making $25,000 to $45,000 a year are undergoing a wage garnishment.
Two hospitals in Missouri have come under scrutiny for seeking judgements to garnish the wages of patients unable to pay medical bills. Hundreds of lawsuits have been filed by the two hospitals between the years of 2009 and 2013 to recover payments from patients.
Undergoing a wage garnishment can make paying other debt obligations very difficult. However, depending on the circumstances of a case, filing for bankruptcy could discharge some medical debts.
In addition to possible debt discharge, fling a petition for bankruptcy will put an automatic stay on debts, ending wage garnishments.
We encourage our readers to find out more about potential benefits of filing for bankruptcy by exploring our YouTube page.
The Sader Law Firm – Kansas City Bankruptcy Attorneys