Have past due medical bills? Your paycheck may be in jeopardy.
By Tracy L. Hirsch
If you owe money to a Louisville hospital or doctor’s office and haven’t set up a payment plan, you’ll most likely get sued. Here’s how to protect yourself.
No one wants to have an emergency appendectomy, receive dialysis treatments, or seek medical attention for a host of other health issues. While those things are a part of life, the reality is that the financial burden that comes with those issues is often more stressful than the disease itself.
This is because the bills are often too high to pay in one lump sum. As a result, many patients don’t make any payments, and hospitals are starting to take action. There has recently been an increase in the number of hospitals that have been garnishing the paychecks of patients who have unpaid bills, including their own employees.
For example, over the past six years, the University of Virginia Health System (the third largest hospital in Virginia) has filed approximately 36,000 lawsuits totaling 106 million dollars. This has led to patients having their paychecks garnished, and their homes foreclosed.
Whether medical treatments are billed “out of network” or you have an extremely high deductible, paying your healthcare bills in full may seem impossible.
While it’s tempting to bury your head in the sand and ignore those bills (and the collection notifications that eventually follow), it will only make matters worse, as those healthcare facilities can sue you and take part of your paycheck.
If you have unpaid medical bills and haven’t set up a payment plan, you are most likely going to see part of your paycheck missing in the near future.
This is known as a wage garnishment, and once your wages are being garnished (i.e. wages that are legally removed from your paycheck to pay your medical bills), there’s really only one option to stop it.
So how can you prevent it from getting to the point where your healthcare facility has obtained permission from the Court to take part of every single one of your paychecks? You take action as soon as you receive a bill.
Here’s how to realistically pay your medical bills and protect your paycheck:
1.) Set up a payment plan with your healthcare provider as soon as possible.
If you’ve been billed through insurance and have to pay your in-network deductible, it’s possible to pay it in installments. For example, if you have a family deductible of $10,000, and you or one of your family members had surgery, you’ll owe the hospital $10,000 plus your out-of-pocket maximum.
For most people, it’s not financially feasible to cut a check for ten grand to a Louisville hospital and call it a day. So what do you do?
As soon as you receive a bill, contact the billing department and tell them that you want to set up a monthly payment plan. If your doctor’s office or hospital agrees to let you make payments, get a contract in writing, and if possible, have a lawyer review it to make sure that there aren’t any loopholes.
Once you’ve signed paperwork stating that you will pay the agreed upon monthly amount (and you are sure to pay it on time every month), that will keep them from suing you because they see that you’re making an effort to pay your balance.
2.) If you don’t have health insurance or you have an out-of-network bill, ask for a cash price.
If you had a procedure that wasn’t covered by insurance or you don’t have health insurance at all, you can ask for a “cash” price. This doesn’t mean that you literally have to pay them in cash — it means that you’re asking for a fair-market value for your medical services.
If you’ve ever had an EOB (“Explanation of Benefits”) from an insurance company in the past, you’ve most likely noticed that the prices are over-inflated and don’t actually represent the true value of the procedure.
For example, if your friend had blood work done, their insurance was billed $250 for one lab, and your friend was ultimately charged $35, that’s because it’s what the lab actually costs. If you had that exact same lab done, but didn’t have insurance or were billed as “out of network,” you would be expected to pay $250.
It’s not fair for a hospital to charge that amount for someone who’s uninsured since the hospital only gets paid a fraction of that total when billing patients with insurance.
While the billing department will most likely give you a hard time (and may even tell you that they don’t do cash pricing), politely tell them that you want to pay them for their services, but you want to be treated fairly.
This will require some effort and research on your end, and you may need to speak to multiple people. However, it can pay off literally and figuratively when you eventually settle on a fair and realistic price.
3.) If your wages are already being garnished, meet with a Louisville Kentucky bankruptcy attorney.
If you didn’t set up a payment plan with the medical facility or ask for a cash price, and now your wages are being garnished, there’s still hope. Filing for a Chapter 13 bankruptcy in Kentucky can stop your creditor from taking 25% of your wages, stop a foreclosure, and provide a way to set up an affordable monthly repayment plan that will protect you from all of your creditors.
For example, most people who have medical debt also have other types of debt. If you have past due medical bills plus credit card debt and a car loan that you’ve been struggling to pay, filing for bankruptcy will protect you from being sued by those creditors as well. More often than not, a Chapter 13 monthly payment is much lower than what would be taken out of your paycheck every month.
To learn more about how bankruptcy can help stop a garnishment, click here. If you need immediate protection, you can text or call me at (502) 435-2593, and I’ll work with you to protect your income. You don’t have to toss and turn at night or worry about losing more of your hard-earned money — relief is on the horizon, and it all starts with a free consultation.
All the best,
Tracy L. Hirsch
Hirsch Law Bankruptcy Lawyer
Ready to schedule your free appointment? Text or call me at (502) 435-2593!