Earlier this year I was visited by an older woman who needed some help with medical bills that she couldn’t manage. She had suffered a heart attack and had to visit the emergency room and stay in the hospital for a few days. Shortly after she left she got a bill in the mail for $65,000. She came to me wanting to know if I could help; however, she didn’t want to file bankruptcy. She wanted to know if I could help her settle the debt. After I explained to her that I couldn’t guarantee that the hospital would negotiate with me, I agreed to try and help her.
Since her account had already moved to a collection agency, I sent them a letter explaining her financial situation and that, while she was contemplating bankruptcy, she would prefer to avoid it by settling for a lower amount that she thought she could manage. I followed up with a phone call about a week later. When I talked to the collection agency, they explained to me that before the hospital could agree to settle for a lower amount, my client would have to apply for financial assistance. What that entails is filling out an application explaining why you believe you qualify for a reduction in the amount you owe. It also involves providing certain financial information. In this case it involved providing tax returns, bank statements, and documents to show how much she was making as a self-employed person.
The hospital sent followup letters asking for clarification as well as a phone interview between my client and the hospital. Finally, about about two and a half months, we got a response. The hospital agreed to forgive the entire amount of my client’s debt! As you can imagine, she was thrilled. And I was pleased to be able to help someone with such a huge financial burden without resorting to bankruptcy.
In the future, I’ll use this tool as much as possible to help clients avoid bankruptcy. I imagine that part of what helped her case was how recent her treatment had been. She came to me within a few weeks of getting the bill. It’s hard to say if it would have been possible to settle the debt after it had been sold to multiple collection agencies. Of course, this bill was also from the hospital. Private doctors likely will not have a debt forgiveness program.
If you have questions about how applying for financial aid to reduce your medical bills, or whether bankruptcy may be a good option, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.