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Nonprofit hospitals suing for medical debt

Many people in Ohio are forced to seek medical care when they are unable to afford it. Sometimes, people are uninsured while at other times, the insurance they have does not cover all of the care that is received. Some people are forced to utilize the services of a nonprofit hospital as the only source of care that they may have available. Although nonprofit hospitals do not have to pay taxes on their profits and receive numerous other breaks in exchange for their provision of care to the poor, these hospitals many times turn around and sue the people who are most in need when the people are unable to pay their medical bills.

The problem is a severe one. Uninsured people are often charged a premium for received medical care, often at inflated rates much higher than the hospitals charge to insurance companies for the same services. Although charitable programs may exist to help pay for the care, many people are unaware of their existence or do not qualify.

It is common for nonprofit hospitals to enlist the help of debt collection agencies to go after people for unpaid medical debt, regardless of their financial circumstances. These debt collectors, in turn, often file lawsuits against people who are struggling just to get by. Many either do not show up for court, receiving default judgments against them. Others show up without the assistance of a lawyer. If a judgment is rendered, it will often include court-imposed statutory interest. Judgment creditors then can garnish the person's after-tax income for up to 25 percent each paycheck.

People can avoid such predatory practices by filing for bankruptcy. When a petition is filed, the bankruptcy court issues an automatic stay against further collection activities. There are eligibility and other requirements associated with a filing that a bankruptcy attorney can explain.

Source: The Huffington Post, "How Nonprofit Hospitals Are Seizing Patients' Wages", Paul Kiel, December 19, 2014

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