Medical Debt

August 7, 2017

Understanding Medical Debt

Medical debt is leading cause of financial stress and one of the leading factors in bankruptcy filings. A major illness or a serious accident can land a person in debt quickly. Even with insurance, your high deductible and other costs that are not covered might become a burden. Sometimes the debt becomes so high that the debtor simply cannot pay while covering their other bills. Thousands of New Yorkers face financial disaster every year because of those bills.


The Scale of Medical Debt in New York:

Health care is a huge business in New York City, with so many firms servicing so many accounts (over 40,000 doctors’ office and clinics, plus almost 80 hospitals) there are bound to be some honest mistakes and some abuses. Thousands of New Yorkers each month find themselves stuck with medical debts they cannot pay off, or do not owe.

If the debt is legitimate, you can experience serious financial consequences if you do not pay. As soon as it becomes clear you cannot keep up the payments, you need to work with the creditor or with a lawyer to settle the matter before your credit is damaged. Your credit rating might be damaged even if you do not owe the debt in question.


The Problem of Bad Medical Debt:

Medical debt collectors sometimes use sloppy or shady practices to collect those debts. The problem is that many individuals do not actually owe that money. Those creditors tend to use debt collection firms that specialize in medical debt. Fortunately for debtors, those firms tend to be sloppy. According to a 2017 study by the United States Public Interest Research Group, nearly 2/3 of individuals who complained to federal regulators about medical debt claimed they did not actually owe the money. Even if that figure is high, many medical bills contain errors. Other bills are probably for services that were never delivered.

Debt collectors often go after debt that has been paid, has been discharged in bankruptcy, or that was never owed by the alleged debtor at all. As with most debt, there is a statute of limitation on medical debt. Some debt collectors and creditors will attempt to collect “expired” debt anyway, sometimes not informing the debtor that the statute of limitation has passed.

You need to have an attorney who can identify those issues and use them in your defense whenever possible.

If you are facing high medical debt and are being pursued by a debt collection frim, you need to consult a collections attorney in New York City to represent your interest. Contact us today at 212-349-6400 to discuss your case.

Attorney Katz can be reached at (800) 251-3529