Jeffrey M. Rosenblum, P.C.
A Fresh Start

Outstanding medical bills could pave road to financial ruin

There are many ways in which New York residents could find themselves in a big financial hole. Spending on credit cards can quickly spiral out of control with interest charges and late fees, for example. Moving money around to pay credit card bills could leave you short on a mortgage payment; continual nonpayment of mortgage payments could send you down the road to foreclosure.

Another manner in which people might find their debt levels reaching to unsustainable heights is through medical debt. Catastrophic medical events can cost tens of thousands of dollars or more; even routine procedures can be more expensive than people realize due to the complicated nature of health insurance billing.

It may be partially due to the fact that initial medical bills may seem like little to worry about. Statements may show up before an insurer has paid them, so the amount the bill says might be too high. Errors are made, making it seem as though procedures or physicians that are in-network and covered actually aren't.

In any case, though, if a medical bill ultimately goes unpaid, there can be serious consequences. Outstanding debts might be referred to collection agencies, leading to unwanted collection calls and black marks against your credit rating.

If this happens, filing for bankruptcy might be an option worth considering. Bankruptcy can stop creditor harassment and potentially allow for a fresh financial start. An experienced New York bankruptcy attorney can provide guidance to people who find themselves in this kind of situation.

Source: The New York Times, "When Health Costs Harm Your Credit," Elisabeth Rosenthal, March 8, 2014

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