Managing healthcare expenses, as well as medical bills, can be difficult. But there are ways to decrease these expenses and potentially reduce your medical debt. Here are some important factors to consider when dealing with medical debt in Texas.

Understanding the Medical Bill

To avoid confusion, it is crucial to know why you are being charged in medical bills. These bills can contain complex codes and language that might not be familiar to you. You can ask for a detailed bill that explains the cost of each service. This can help you identify mistakes or repeated charges that you can question.

Insurance Verification

Ensure that your healthcare provider has all the correct insurance information. Miscommunications between the provider and the insurance company can sometimes result in charges that should have been covered. Review your insurance policy to understand what is covered, and cross-check it with your bill. This will help you identify any discrepancies that need to be addressed.

One of the most common questions attorneys at Acker Warren, P.C. are asked by potential client’s is, what happens to my house and car in bankruptcy?

The short answer to this question is that you almost always may keep and continue to pay for you home and car. However, it depends on a multitude of factors, for instance, what state you live in, if you are current on the payments, is it your only house or vehicle, what other property do you own, etc.?

To more thoroughly understand what happens to a home or vehicle in bankruptcy an explanation as to the different types of debts, the different types of assets, and the different chapters of bankruptcy is necessary.

When you file for bankruptcy under Chapter 7 or Chapter 13 it can stay on your credit report for up to 10 years. Luckily for most of our clients, the bankruptcy being reported on their credit report isn’t too damaging. Most of our clients actually see their score improve, because their debt-to-income ratio instantly improves, and because creditors are required to remove any negative reporting from the credit report. As a result, getting a car, loan, or credit card is typically not difficult.

Additionally, there are actions you can take on top of filing bankruptcy in order to hasten the process of improving your credit score. This post details some strategies to achieve that goal.

Chapter 7

You can discharge most, if not all, of your debts after filing for Chapter 7 bankruptcy. This means that a lender cannot collect a discharged debt, and you’re no longer responsible for repaying it.

Medical bills are a very common reason people file for bankruptcy. For those who cannot pay their medical bills and do not file for bankruptcy, their situation likely will worsen.

If you are unable to pay medical bills, you’ll start getting late-payment notifications, and late fees will accrue. The medical provider may sue you in the future and win a monetary judgment against you, or it could also result in wage garnishment, a bank levy, or the placing of a lien against your non-exempt property.

Medical Bankruptcy

If you can’t pay the bill and it appears that the creditor will pursue you for payment, your good credit will suffer since a collection action will appear on your credit report. If they sue you and win the case, the medical provider could garnish your bank account or pursue other collection measures. When it comes to bankruptcy, filing as soon as possible could help you get back on your feet financially faster.

You may be asking, though, how you can keep your car when filing for bankruptcy.

There are two main types of bankruptcy: Chapter 7, which involves liquidating non-exempt assets (in Texas thankfully very few assets, for most people, are non-exempt), and Chapter 13, which focuses on debt repayment. What will happen to your vehicle if you file for bankruptcy is determined by the type of bankruptcy you declare and the amount of equity you have in your car.

In case you file Chapter 7

Most of your debts are discharged, meaning your legal liability to pay the creditor/ debt has been extinguished in Chapter 7 bankruptcy. In exchange, you must surrender non-exempt property which the bankruptcy trustee will sell and use the funds to pay your unsecured creditors. In Chapter 7, the ability to keep your vehicle is determined by whether or not your equity is classified as exempt and whether or not you are behind on your car payments. (Equity = Balance of Loan – Vehicle Value) An experienced attorney can help you navigate the potential pit falls of filing for bankruptcy with a vehicle that you want to keep or surrender. It is extremely unlikely to have a non-exempt vehicle in a Chapter 7 bankruptcy.