Understanding Georgia Medical Debt Forgiveness

Can Medical Debt Be Forgiven in Georgia?


Can Medical Debt Be Forgiven in GeorgiaHealthcare costs are at an all-time high, and millions of Americans are struggling to pay for their medical care. Medical debt can be crippling. Even people with health insurance struggle because insurance does not cover all medical costs.

Unpaid medical bills have brought countless families to the verge of bankruptcy. Hospitals can sue you for outstanding medical bills. In Georgia, the contractual statute of limitations is 6 years. The statute of limitations on medical debt is calculated from the date of your last completed payment. So, if you have not been sued within this period, you can raise the statute of limitations as a defense to the claim.

Since many medical bills are subject to interest, you might wonder how you will pay them. At Cherney Law Firm, LLC, we can help you explore options and find a potential way out, including the possibility of debt forgiveness.


What Is Medical Debt?


Medical debt is debt relating to any medical expenses. This is irrespective of whether the debt is due to a hospital, a doctor, or any other healthcare provider.

These expenses can arise from a variety of medical situations, including doctor visits, surgeries, emergency room visits, prescription medications, medical tests, and ongoing treatments for chronic conditions. When individuals are unable to pay these medical bills in full, it results in medical debt, which can have significant financial implications and challenges.


Statistics on Medical Debt in Georgia

Medical treatment in the U.S. is expensive. The statistics on medical debt are shocking. For example, in 2021, the Consumer Financial Protection Board reported $88 billion in medical debt on consumer credit records.

According to a recent Kaiser Family Foundation (KFF) review of official data, one in ten adults, or 23 million people in the U.S., have medical debt. This number includes 3 million people who owe more than $10,000 and 11 million who owe more than $2,000, respectively. One-fourth of those who have medical debt owe $5,000 or more.


What Happens If You Don’t Pay Your Medical Debt?


If you don’t pay your medical debt, it can lead to debt collection efforts, negatively impact your credit score, and result in additional charges and fees. Legal action, such as lawsuits or wage garnishment, may also be pursued, causing more financial stress.

To avoid these consequences, communicate with your medical provider and explore financial assistance programs or flexible payment options they may offer to manage your medical debt responsibly. Seeking guidance from a financial counselor can also help you find a resolution and alleviate the burden of unpaid medical debt.


How Does Medical Debt Affect Credit Scores?


How Does Medical Debt Affect Credit Scores

Medical debt can wreck credit scores. This may leave you unable to get loans, mortgages, and car finance. It can also affect your ability to rent property once your credit score is affected.

In 2022, the three national credit reporting agencies, Equifax, Experian, and TransUnion, announced medical collection debt reporting reforms. The goal is to assist consumers faced with unexpected medical bills. These efforts should eliminate approximately 70% of medical collection debt tradelines from consumer credit reports.

From July 1, 2022, paid medical collection debt will no longer appear on consumer credit records. Additionally, unpaid medical collection debt will appear on a consumer’s report after a year has passed. This reflects an increase from 6 months. It provides debtors more time to engage with their insurance companies and healthcare providers. This gives the debtor additional time to resolve the debt before it is recorded on their credit file.

The credit reporting agencies will also stop reporting medical collection debt under $500 on credit reports in the first half of 2023.


Georgia Medical Debt Forgiveness Programs


Georgia Medical Debt Forgiveness ProgramsMedical debt forgiveness is a process in which a creditor, often a nonprofit organization, forgives or cancels some or all of the medical debt owed by an individual.

In Georgia, there are innovative nonprofit organizations and financial assistance programs that aim to provide medical debt forgiveness. These organizations raise funds to purchase medical debt from hospitals at substantial discounts, as they buy the debt in bulk. Once the debt is settled, the debtor is informed that their medical debt has been fully extinguished.

A notable example of such a nonprofit is RIP Medical Debt. Through donations, RIP Medical Debt helps alleviate the medical debt burden of low-income individuals. To date, they have successfully erased over $9,879,302,982 in medical debt for more than 6,633,189 individuals.

If you are the lucky recipient of debt forgiveness, your medical bills are settled, and you no longer owe anything towards them. The only snag is that you cannot apply for this debt relief. You are randomly identified as a benefactor through data analysis. Specific criteria are applied, and if you meet these criteria, you may be chosen.

Usually, eligibility for medical debt forgiveness is restricted to people who either:

  • Earn less than 4 times the federal poverty line, or
  • Spend 5 percent or more of their income on debt.


Can Bankruptcy Evade Medical Debt?


If you don’t qualify for medical debt forgiveness, you still have options to handle your outstanding medical bills. One effective approach is to consider declaring bankruptcy

You can erase any outstanding medical debt through Chapter 7 bankruptcy and start afresh.  Or you can put your medical debt into a 3- to 5-year repayment plan through Chapter 13 bankruptcy.

When you file for bankruptcy, the court enacts an automatic stay, which legally requires your creditors to stop all collection efforts immediately. This means they cannot contact you or pursue any further actions to collect the debts while your bankruptcy case is in progress.

Cherney Law Firm, LLC has experienced attorneys well-versed in both Chapter 7 and Chapter 13 bankruptcy, ready to provide expert guidance and support to help you navigate the process effectively.


Cherney Law Firm, LLC and Medical Debt


Cherney Law Firm, LLC and Medical DebtIf you are facing mounting medical debt and are concerned about potential legal actions, our skilled legal professionals at Cherney Law Firm, LLC, are here to assist you. We understand that every situation is unique, and we can help you evaluate your debt to determine the best way forward. This may involve negotiating with creditors on payment plans or, if necessary, guiding you through bankruptcy proceedings.

It’s essential not to ignore any legal proceedings related to your medical bills. If you suspect you might be sued for medical debt, it’s crucial to seek legal advice promptly. Our team is dedicated to helping you address your debts in the most effective way possible, protecting your financial future.

Reach out to us today for a consultation, and let us provide the guidance and support you need to regain control of your finances.

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