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Archive for the ‘medical debt’ Category

Federal Rules Debt Collectors Must Follow

November 27th, 2014 at 1:00 pm

debt collectors in San Antonio, Texas bankruptcy lawyerWhen a person owes a defaulted amount on an account, such as a credit card or prior utility bill, the company who the original debt is owed to will often “charge off” that debt after a certain period of time has gone by. Someone who is struggling with overwhelming debt may have multiple accounts which have been declared charge offs by the original creditor.

There are certain guidelines a creditor must follow before they can charge off an account. If the account is an installment loan (such as an auto loan or mortgage), then the delinquency must be at least 120 days past due. If the account is a revolving credit account (such as a credit card), then the delinquency must be at least 180 days past due.

At this point, the creditor has three options for debt collection for the account. The company can continue to pursue collection themselves; they can hire a third-party collection agency to continue collection activity; or they can sell the debt to a debt buying company. Debt buying companies purchase debt portfolio from creditors and any funds then collected on the debt belong to the debt buyer.

Regardless of what option a creditor decides on, there are federal rules that have been established that a debt collector must follow. These rules were established under the Fair Debt Collection Practices Act (FDCPA) and include:

  • A debt collector must sent a written notice within five days of the first initial telephone contact which validates the amount of the debt owed;
  • Debt collection may only take place between the hours of 8:00 a.m. and 9:00 p.m.;
  • A debt collector may not contact a person at their workplace if they have been told either orally or in writing not to do so;
  • A debt collector must stop contacting a person if the person sends a certified letter to the debt collection telling them to stop all contact. The only exception to that contact would be the debt collector acknowledging the no-contact letter and/or contacting the person to let them know they will be filing a lawsuit or other activity;
  • If a person is represented by an attorney, then the debt collector must contact the attorney and not the person who owes the debt; or
  • Debt collectors may not harass, make threats, or make false statements in order to intimidate or scare a person into paying the debt.

If bankruptcy seems like a viable option for your financial situation, contact the Law Offices of Chance M. McGhee. San Antonio, Texas bankruptcy lawyer, Mr. McGhee has helped clients over the past 20 years regain control of their financial lives. Call the law firm at 210-342-3400.

The Truth behind Bankruptcy Filing

July 16th, 2014 at 1:23 pm

bankruptcy filing, credit scores, impending bankruptcy, medical debt, San Antonio bankruptcy attorney, Texas bankruptcy attorney, unemploymentAmericans file for bankruptcy each year as the result of owing more money to creditors than can actually be paid. While often times the term “bankruptcy” is stigmatized and correlated with poor spending habits and large credit card bills, the truth is it is a necessary practice for economic relief in dire times.

Most people who file for bankruptcy are not irresponsible, nor are they trying to use the process as a means of simply walking away from their debt. US News stated in an article, citing a study by The Bureau of Labor Statistics, that as of April 2012 more than 5.2 million people across the country had been unemployed for six months or more. In addition to unemployment as a factor, money lost due to divorce is also a large contributor to outstanding debt, as well as medical expenses.

There are several other common misconceptions about bankruptcy filing and those who file. Consider the following misunderstood and misinterpreted bankruptcy concepts everyone should know:

  • Bankruptcy filing ruins credit scores permanently: Although many believe they will never be able to get another loan or credit card after filing, this is not necessarily the case. You may have to start slowly, but making regular payments on loans will gradually increase your score.
  • Bankruptcy may not forgive all kinds of debt: This is a widely held belief that often is not true. Certain types of debt and payments are not absolved with bankruptcy. These include obligations such as alimony and child support, some kinds of student loans, and any type of criminal fines.
  • Use of credit cards with an impending bankruptcy: Be wary of using your credit cards right before you file, and never deliberately run up your bills under the assumption that it will be forgiven. This practice has been deemed as committing fraud in the past, and you run the risk of getting stuck with the bills after the process anyway.

If you are struggling with debt problems in the San Antonio, Texas area due to job loss, medical issues, or any other reason, seek help from a San Antonio bankruptcy attorney today. Contact the Law Offices of Chance M. McGhee for all of your bankruptcy needs, and to start the process of financial relief and recovery.

The Financial Impact of Unpaid Medical Bills

July 10th, 2014 at 9:53 am

Attorney Chance McGhee, health insurance, high deductibles, insurance plans, medical bills, medical debt, medical expenses, San Antonio bankruptcy attorney, unpaid medical billsEvery year people suffer from medical conditions and injuries that leave them with much more than scars. They are also left with insurmountable bills. These bills can quickly pile up over time and become overwhelming. In the end, filing for a Texas bankruptcy may be the best option for financial recovery.

According to a study published by CNBC, almost 2 million people filed for bankruptcy in 2013 as a direct result of unpaid medical bills. And while it is easy to see how this can happen to someone without health insurance, the truth is that it can happen to anyone.

In 2013 nearly 10 million insured American adults had more medical bills from that year than they could pay off. Insurance plans have increasingly high deductibles and leave members with up to $10,000 in out of pocket expenses.

The rise in bankruptcies due to medical debt can be compounded by other issues as well. When an unexpected cost arises, often times people have no other choice but to pay with credit cards. Yet when paid with credit, interest must be taken into account as well, thus making large bills even larger. Consider the following statistics published by the National Patient Advocacy Foundation:

  • Medical expenses are a contributing factor in 62 percent of bankruptcies;
  • In 41.8 percent of cases, the person filing could designate a specific health issue;
  • 54.9 percent of bankruptcy filers specifically cited medical costs as a problem; and
  • 37.8 percent of people stated income loss due to illness as a contributing factor.

Texas bankruptcies, due to medical debt, are on the rise. Medical emergencies are by definition not planned, and therefore it is impossible to allocate finances in advance. If you have accrued significant debt due to unpaid medical bills, it is important to consult with an experienced San Antonio bankruptcy attorney to assess your options. Located in the San Antonio area and serving the surrounding area, the Law Offices of Chance M. McGhee provide all clients with professional bankruptcy services.

Medical Bills & Personal Bankruptcy: An Unfortunate Trend

April 9th, 2014 at 7:00 am

Affordable Care Act, Law Office of Chance McGhee, medical bill debt, medical bills, paying medical bills, personal bankruptcy,Texas bankruptcy attorneyEven though the enrollment deadline for healthcare under the Affordable Care Act just passed, it is clear that medical bills are still a big problem for many Americans. According to NerdWallet, one in every five Americans will have difficulty paying medical bills this year. Medical bills are actually the leading cause of personal bankruptcy filings, once individuals and families have used savings, credit cards, or attempted to refinance their homes.

While around 20 percent of people are struggling with medical bills in one form of another, three out of every five bankruptcies is due to medical bills. In fact, nearly 10 million Americans with year-round healthcare will still be unable to pay their medical bills. Many families look for ways to cut costs, including skipping vital prescription medications. Others will turn to loans, credit cards, or other financing methods. Some of those families, however, will find themselves facing bankruptcy.

One catastrophic medical event can set an individual or family back. An unexpected diagnosis or major accident can lead to many months or years of treatment, racking up bills. Those who are covered by health insurance may overestimate the extent to which their policy will help them, and some may find out too late that they are buried in bills that they can never hope to pay. And even when a good faith effort is made to pay down a selection of bills, it may still be impossible to catch up.

If you have accumulated medical bills and simply cannot afford to pay them, you are not alone. Even with health care coverage in place, many Americans across the country are struggling to pay off medical debts. You do have a way out. You do not have to continue living under the pressure of colossal bills. If you would like a fresh start, contact a Texas bankruptcy attorney today.

Property Exemptions for Bankruptcy in Texas

March 17th, 2014 at 12:12 pm

bankruptcy exemptions, Texas, federal exemptions, Texas bankruptcy exemptions, types of bankruptcy, debtLosing your job or getting expensive medical bills can have devastating effects on your budget.  Without ample savings, it can be hard to make monthly payments, and eventually you may lose your car or even your home.

However, bankruptcy can stop foreclosure, repossession and wage garnishment through selling property or reorganizing existing debts if you are earning income. However, filing for bankruptcy does not mean losing all your worldly possessions. When filing your paperwork, you may choose to use either federal exemptions or the exemptions set out by the statutes of Texas.

Both the Federal and State exemptions allow the debtor to protect equity in their primary residence. This is called the Homestead Exemption and it does not provide any protection to rental or investment properties. Under the federal exemption, you can shield up to $22,975 of equity from a bankruptcy trustee. The homestead exemption in Texas is not limited by the amount of equity in the home, but the size and location of the property. It cannot exceed an acre if it is located in a populated city, village or town.  In rural areas, the exemption can be as large as 100 acres.

Personal property, other than real estate, also has exemptions that protect it during bankruptcy based on the kinds of property. For example, up to $3,450 can be exempted for a motor vehicle under Federal exceptions.

The exemptions in Texas allow for each driver in a household to use.  But the total allowance for all types of property in Texas is mere $30,000 and double for a family. In that case it is important to have a clear idea of how you can use the most of your exemptions to cover home furniture, food, clothing, and other important supplies.

There are other exemptions that should be reviewed while filing for bankruptcy, such as, wages, pensions, insurance.  Contact an experienced bankruptcy in San Antonio today who can help you determine the best step for your finances if bankruptcy is in your future.

How Does Filing for Bankruptcy Affect My Credit Score?

February 14th, 2014 at 4:47 pm

bankruptcy IMAGEEvery person who opens up a credit card, gets a loan, or finances a car has a credit report. Over years of making payments and opening new lines of credit, the credit report will reflect your ability to pay bills on time and effectively manage your debts. Lenders will review your report while deciding if you are a good or bad credit risk. Events like filing for bankruptcy are also reported to credit reporting agencies and can negatively impact your score.

The type of bankruptcy which is filed has different effects on your report. A Chapter 7 bankruptcy can eliminate the majority of your debts such as credit cards, medical debts, and even secured debts. Since it does not require the debtor to repay debts, it will remain on your credit report for ten years. A Chapter 13 bankruptcy is a reorganization which requires repayment of part of the debts. This kind of bankruptcy stays on your credit report for seven to ten years, depending on the credit reporting agency.

A bankruptcy will also lower your overall credit score. A higher credit score will be decreased by more points than a lower credit score. Credit agency FICO created two examples of how this works. If you have a credit score of 780, filing for bankruptcy can take between 220 to 240 points off your score. Whereas, if your credit score is 660 and you file, the decrease is only 130 to 150 points. The rationale is that those with a lower score are already risks, so a bankruptcy is not as detrimental.

Being afraid of filing for bankruptcy can mean years of struggling with debts. If that means that you are missing payments, opening up new accounts, or using too much of your credit, then your credit report will decrease due to this risky behavior. Filing for bankruptcy gives you a financial restart necessary to start rebuilding your credit. Contact an experienced bankruptcy attorney in San Antonio today to discuss what filing for bankruptcy can do for you.

Insured Patients and Bankruptcy

October 8th, 2013 at 8:54 am

Many people assume most bankruptcy filings are due to out-of-control spending habits or poor money management.  However, according to a study published in The American Journal of Medicine, one of the biggest reasons people file for bankruptcy is unpaid medical bills.

More surprising is that many who file for bankruptcy due to medical bills have health insurance.  So even with the expansion of health care coverage through the Affordable Care Act, there will still be people struggling under the weight of medical bills.  Understanding the expenses related to health insurance can help you be financially prepared.

 

Monthly Premiums

Unless you have an employer covering your full monthly premium, most people will have to pay at least part of this to have health insurance.  The amount you’ll pay for your monthly premium has many variables, including the amounts set for your deductible, co-payments and co-insurance.

Deductibles

A deductible is the amount of money you must pay before the health insurance company will begin paying benefits. Deductibles range considerably depending on your plan. Many people try to save on their monthly health care premiums by selecting plans with high deductibles.  This can be an effective strategy but a high deductible can be a real challenge if you ever need to pay it.

Co-Payments and Co-Insurance

Once your deductible is met, you may have co-payments and co-insurance to pay.  A co-payment is a specific dollar amount you may be required to pay each time you visit the doctor.  A co-insurance is a percentage of the covered service you may be required to pay.

Lifetime Maximum

Sadly, a serious illness or injury can deplete your health insurance completely, as many health insurance plans have a lifetime maximum.  This means that once your insurer has paid out a specific dollar amount, you no longer have benefits from that company.

What Can I Do?

You should discuss your financial concerns with your doctor.  While you do not want to compromise the quality of your care, sometimes good options are available that are less expensive.  And do not be afraid to shop around.  Look for cheaper prescription drugs and cheaper diagnostic tests.  Finally, discuss payment plans with your doctor’s office.

If you find yourself with mounting medical bills you cannot pay, bankruptcy may be the best option for you.  Contact an experienced Texas bankruptcy attorney today.

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210-342-3400

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