Hospital / Medical Bills

Our health and the health of our loved ones is of tremendous importance to all of us, so it is not surprising that many people are willing to pay whatever it costs to treat and care for serious illnesses or injuries. Medical ailments, however, can be extremely costly and the bills that patients receive afterwards can cause serious financial strain.

Some injuries or illnesses can be serious enough to prevent individuals from being able to return to work, a true double-edged sword as such people not only get hit with massive medical expenses but also an inability to pay them. With the high cost of health care in the United States it should come as little surprise that immense medical and hospital bills have frequently been one of the primary reasons that people need bankruptcy protection.

Bankruptcy Attorney in Cincinnati, OH Discusses Hospital / Medical Bills

If you are overwhelmed with hospital or other medical bills, you may be able to benefit from filing for Chapter 7 or Chapter 13 bankruptcy. It is in your best interest to make sure that you have legal representation.

The Cincinnati bankruptcy lawyers of Steiden Law Offices have offices in Cincinnati, West Chester, and Maineville in Ohio as well as Kentucky locations in Covington and Florence. Our attorneys can review your case and discuss all of your legal options when you call to set up a free, confidential consultation.

Overview of Hospital / Medical Bills in Northern Kentucky Bankruptcy Cases

Classification of Hospital / Medical Bills in Ohio Bankruptcy Cases

Under Title 11 U.S. Code § 507, expenses and claims have priority in the following order in bankruptcy cases:

Unsecured claims for domestic support obligations (child support, alimony, etc.).

Administrative expenses allowed under Title 11 U.S. Code 503(b), unsecured claims of any Federal reserve bank related to loans made through programs or facilities authorized under section 13(3) of the Federal Reserve Act (12 U.S.C. 343), and any fees and charges assessed against the estate under chapter 123 of title 28.

Unsecured claims allowed under Title 11 U.S. Code 502(f) (relating to Allowance of claims or interests).

Allowed unsecured claims, but only to the extent of $10,000 for each individual or corporation, as the case may be, earned within 180 days before the date of the filing of the petition or the date of the cessation of the debtor’s business, whichever occurs first, for certain enumerated conditions.

Allowed unsecured claims for contributions to an enumerated employee benefit plan.

Allowed unsecured claims of persons engaged in the production or raising of grain, as defined in Title 11 U.S. Code 557(b), against a debtor who owns or operates a grain storage facility, as defined in Title 11 U.S. Code 557(b), for grain or the proceeds of grain, or engaged as a United States fisherman against a debtor who has acquired fish or fish produce from a fisherman through a sale or conversion, and who is engaged in operating a fish produce storage or processing facility—but only to the extent of $4,000 for each such individual.

Allowed unsecured claims of individuals, to the extent of $1,800 for each such individual, arising from the deposit, before the commencement of the case, of money in connection with the purchase, lease, or rental of property, or the purchase of services, for the personal, family, or household use of such individuals, that were not delivered or provided.

Allowed unsecured claims of governmental units, only to the extent that such claims are for certain enumerated conditions.

Allowed unsecured claims based upon any commitment by the debtor to a Federal depository institutions regulatory agency (or predecessor to such agency) to maintain the capital of an insured depository institution.

Allowed claims for death or personal injury resulting from the operation of a motor vehicle or vessel if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.

Generally, domestic support obligations are considered priority claims that must be paid in full in any bankruptcy case. Secured claims, such as creditors with liens against a debtor's property, are not considered priority but often have special rules about how they will be treated.

Unsecured claims can be considered priority or nonpriority. Most medical and hospital expenses are considered nonpriority unsecured debt.

Discharging Hospital / Medical Bills in Kentucky Bankruptcy Cases

Because medical bills are usually classified as nonpriority unsecured debt, this means that most hospital and medical expenses are wiped out when a debtor files for Chapter 7 bankruptcy. Whatever portion of the medical bills that are not paid by the trustee will be discharged.

In a Chapter 13 bankruptcy, medical expenses will generally be worked into the debtor's repayment plan. Depending on the individual's income, the debtor could end up repaying a portion or all (with possible interest) of the medical bills over the course of roughly three to five years.

The United States Bankruptcy Code does not establish any limits on the amount of medical debt that a person may discharge.

Ohio Medical Bankruptcy Resources

NerdWallet Health finds Medical Bankruptcy accounts for majority of personal bankruptcies — NerdWallet is a personal finance website that "offers financial tools and objective advice to help people understand their options and make the best possible decisions." On June 19, 2013, NerdWallet Health published this series of estimates highlighting the strain of medical bills in 2013. According to NerdWallet, 56 million Americans under age 65 would have trouble paying medical bills, and 1.7 million lived in households that would declare bankruptcy due to their inability to pay their medical bills.

Problems Paying Medical Bills: Early Release of Estimates from the National Health Interview Survey, January 2011-June 2012 — The same month that NerdWallet published its study, the Centers for Disease Control and Prevention (CDC)—the federal agency under the Department of Health and Human Services that is also the nation's leading public health institute—published this report that found fewer Americans were having problems paying medical bills. According to the CDC, the percentage of people under age 65 in families having problems paying medical bills decreased from 21.7 percent in the first six months of 2011 to 20.3 percent in the first six months of 2012. The study also found that people under age 65 who were uninsured and those who had public coverage were about twice as likely as those who had private coverage to be in families having problems paying medical bills.

Steiden Law Offices | Cincinnati Medical Bankruptcy Lawyer

Are you considering Chapter 7 or Chapter 13 bankruptcy because you are struggling to pay medical bills? You will want to contact Steiden Law Offices as soon as possible.

Our experienced Cincinnati bankruptcy attorneys represent individuals in Kenton County and Boone County in Kentucky as well as communities all over Hamilton County in Ohio. Call or complete an online contact form to have our lawyers provide an honest and thorough evaluation of your case during a free initial consultation.