One heart attack. One car accident. One stroke.
All it takes is one trip to the hospital and you could be drowning in unpaid medical bills, not to mention debilitating physical and financial pain.
It happens every day. More than a quarter of U.S. adults struggle to protect their assets from medical bills and medical debt remains the number one reason people file for bankruptcy, reports the Kaiser Family Foundation.
Which begs the question, what can you lose due to medical bills? Can hospital bills take your home? Your car? Your savings? While somewhat unlikely, the sad truth is that you can lose your home due to unpaid medical bills, either directly or indirectly.
The Direct Route to Losing Your Home to Medical Debt
A hospital or creditor will usually send you a past due letter before going to court. If it becomes clear that you can’t or won’t pay the balance, the creditor may then go to the courts.
The creditor will file a suit, notify you, then present their case at a hearing in front of a judge. You can present your side of the story at this time as well, hopefully alongside legal representation.
If the judge rules in favor of the creditor, you’ll have a “judgment” against you. A judgment is a legal obligation to pay a debt, meaning a creditor (or hospital/doctor) sued you over an outstanding debt and won. At this point, it doesn’t matter whether you can actually pay the debt. Sadly, judgments are based on what you owe, not what you can afford.
Once filed by the court, the judgment goes on your credit report and becomes public record.
The Judgment Lien
Here’s where things start to get scary. Once a medical practice wins a court judgment against you, they could use it to seize some of your assets. Depending on the laws in your state, a lien can be filed against your home and other accounts. A lien grants the holder a specified amount of money upon the sale of the property, giving the creditor confidence that they’ll eventually get paid.
The lien is registered on the property’s title and the house can’t be sold until the lien is satisfied, which usually happens with the proceeds of the home sale. Once the debt is paid, the lien is lifted and the title becomes clear. In some states, a lienholder can force the sale of a home to satisfy the debt, but it’s not too common. The lien will simply remain until the house is sold.
“In most states, a percentage of the debtor’s employment earnings can be garnished. Generally, before this point is reached,” says attorney Robert J. Mintz, “the patient files a personal bankruptcy to stop the wage garnishment and wipe out the medical bills and other accumulated debts. But that requires that he give up all of his assets including savings accounts, real estate and equity in his home.”
Thankfully, you can avoid a debilitating bankruptcy with HomeGo’s help.
The Indirect Route to Losing Your Home to Medical Debt
Even if there’s no medical lien on your property, you could still lose your home to unpaid hospital bills and medical debt due to the domino effect—when one event sets off a chain of similar events. In theory, you could lose your home to any unpaid bills.
Paying off medical debt while still trying to maintain your lifestyle can lead to maxed out credit cards, missed utility payments, and even getting behind on your mortgage. Keeping up with the financial demands of homeownership becomes a burden.
The roof starts to leak and repairs need to be made, but there’s no money to make them. You could dive deeper into debt trying to stay on top of everything, or you could sell your house to pay off debt and take the first step towards a healthier financial future.
That’s exactly what one HomeGo homeowner did. He sold his rental properties before they fell into disrepair and he was saddled with an overwhelming about of medical debt and home maintenance costs.
“My health had taken a really bad turn for the worse. I lost my kidneys and my bladder. We actually had two other homes as well. I sold all of them because I just didn’t have the wherewithal to continue to take care of my own properties. My health went really quickly, and I didn’t know if I was going to recover or not. I didn’t feel like I could leave my wife saddled with the rent houses.”
Selling your house and moving into a smaller house or apartment could help you get back on your feet, no matter the creditor! If you need to sell your home fast to pay for medical bills and other debts, HomeGo is here for you.
HomeGo Offers a Solution to Getting out of Debt
Sometimes it’s nearly impossible to protect your assets from medical debt. But it can be avoided, especially when you have HomeGo on your side.
Reach out to us before the unpaid medical bills become too much to handle. After one 10-minute visual walkthrough of your home, we can give you an on-the-spot cash offer for your home. Once you accept, we can close in as little as seven days and potentially give you the funds you need to pay everyone from the hospital to the credit card company. Can you imagine the relief?
If there’s already a medical lien on your property, we can assist in making arrangements to clear the title after the sale of your home. HomeGo can help you find your fresh start faster, and on a more flexible timeframe than any other cash home buyer in the area. Click here to request your same-day cash offer. We can help you sell your house to pay off debt today!