A request for advice to my fellow DUers (bankruptcy).

[ArchTeryx]

I know I'm still a low-post newbie to the community (<100 posts) but I am hoping that some folks see this and respond. Along with alot of other people, I'm terribly worried about the effect of this bankruptcy bill on my life.

My situation is better then some. I have no credit card debt -- purged it five years ago and never looked back. I have a large amount of student loan debt, but that's not affected one way or the other by this anyway. My income is definitely well below state averages, though -- I am a graduate student.

Alot of the press is on the effect of this on those with credit card bills. I'm both wise and very lucky -- that's not me. What truly frightens me are the effect of this on those with out of control medical bills.

I have student health insurance with Ohio State, which has a 10% co-pay on everything. I also suffer from a chronic medical condition, ulcerative colitis, whose effects range from mild to totally debilitating. It also has a high risk of causing colon cancer. Beyond that, it creates complications that can be both physically and financially devastating. And it is incurable...flare-ups can be treated with inexpensive pharmaceuticals, but if they fail to respond to them, or complications appear, monstrous medical bills are very possible -- even with insurance. Medical bills that could easily, and unpredictably, drive me into bankruptcy. My flare-ups are getting worse with time.

I don't want to end up an indentured servant to Ohio State Medical Center for the rest of my life.

What could I do to protect against this possibility with the new reality, if anything? Should I prepare to change identities and go underground? Get treatment in another country if things turn life threatening? (I have a sister with a dual citizenship in France). Is there any legal way to fight the hospital? I've long been told that good faith efforts to pay down medical debt would keep it from going to collections, but nowadays it seems that is no longer true, and hospitals sue at the drop of a hat.

Any constructive advice and information would be immensely appreciated. I can't even sleep any more over this.

[liberalhistorian]

1. First of all, welcome to DU!

I am a paralegal who knows bankruptcy/collections law. This bill will, indeed, be an absolute nightmare for those with medical bills due to a serious or chronic illness, such as cancer, diabetes, or your own condition. Hospitals, clinics and doctors are extremely aggressive in collections now and have been for awhile, long before this bill. They are especially ruthless with the uninsured, but go after the insured as well. Payment plans no longer pacify them, they want it ALL NOW, even if you have nothing and no assets.

That's why this bill will really have horrendous consequences for those suffering financially due to medical bills; it will now be much harder to have debts discharged. Not only that, but, under the current law, creditors can only seize CURRENT assets, they can't touch future earnings or assets. This bill, however, turns 200 years worth of accepted legal philosophy and foundation for debtors law upside down and inside out. They will now be able to gain access to and seize FUTURE earnings and assets as well, which is an unbelievable change. So you can see how that will affect those with medical bills due to serious or chronic illnesses, even if they have insurance. It makes me sick just to think about, since the last thing you should be concerned about when you're fighting cancer is money. And more than half of all bankruptcies are filed due to overwhelming medical bills, and they're filed by middle-class families with insurance. These families will now be in perpetual servitude thanks to Congress's perfidy.

Basically, there really isn't all that much you can do right now. You're very smart not to have any credit card debt, definitely continue that. I've been advising people that if they're in financial trouble they need to file bankruptcy NOW before the new overhaul kicks in. But it doesn't sound like you're in that position. Unfortunately, you may very well be in that position in the future, after the new laws have taken affect. The only thing that might make a difference is the "means" test, which rates your income and debt ratio. But even there, and here's the really sickening part, the more you have, the more you get to keep, while the less you have the less you get to keep, now and in the future. Kinda shows where their priorities are, doesn't it? I'm sorry I can't be of more help.

[ArchTeryx]

4. I do appreciate the response.

I was hoping someone experienced with bankruptcy law would give me a heads-up.

It's looking more and more like I'm going to be going back to my Loompanics books, and looking at the underground movements of the 60s for inspiration. I doubt I am alone in this, either. But for now, I'm actually not in bad shape, other then the massive student loan burden. This is more preparing for the worst. Perhaps a bit of the bunkering-down mentality of the survivalist?

[liberalhistorian]

10. MikeG is a DUer who is

an experienced, practicing bankruptcy attorney on the debtor's side. You might try PMing him with some questions, I'm sure he'd be glad to help.

[serryjw]

2. That's WHY you have ulcerative colitis....

You're young with a future..think about middle age people whom are in worse situations. There are many things you can not control in life.STOP worring..What are they going to take away...your graduate textbooks?? Your condition is being caused by you and you have the power to stop it NOW!..start meditating and reduce your stress level

[ArchTeryx]

5. Good point...

Though the flare-ups in my case tend to be seasonally triggered. Early winter is the danger time.

But the stress doesn't help, no. Is why I am starting an exercise program up once the current flare up goes down. :)

[FloridaPat]

3. If you don't have anything, there is not much they can do. Also,

here are two interesting web sites for health cures. One if free and the other very expensive. I am trying the first one. Not sure about the second one. Just live your life. It's a little early to worry about bankruptcy. But as you go through life, build up a case for disability should things go wrong some where.

http://www.watercure2.org/
http://www.molocure.com/index.shtml

[happyslug]

6. I do NOT practice in Ohio but here are some tips

First Hospitals (That receive Federal Funding and most do) MUST admit you and treat you no matter what is your medical condition. This is one of the reason inner-city hospitals are in trouble, but it provides you someplace to get medical treatment IF YOU NEED IT. They may sue you for non-payment afterward, but even after Judgment the Hospital has to treat you for any serious medical problem you bring to them.

I always address medical care first, you can NOT take care of yourself without taking care of your medical problems first.

Now to FINANCIAL security. You did not say if you were married or not, if you are not get married (Don't worry I am single I do not even follow my own advice). If you are married what you and your spouse buy is marital property and as such CAN NOT BE SOLD FOR THE DEBT OF ONE SPOUSE. What I mean by that is that if you are sued, and a Judgment is entered against you, any property you have in your spouse and your name can not be sold to pay off that Judgment unless the Judgment is against both you and your spouse (That is why when you buy a Car or a house the bank whats BOTH Spouses to sign for the loan, thus the Bank can get a Judgment against BOTH Spouses).

Please note if you are married and you go into the hospital make sure your spouse does not sign anything that agrees to pay for your care. Now the Hospital may sue under the "Necessities" Doctrine i.e. a spouse is responsible for the "Necessities" of a Spouse, but lets get to that horse when we come to it.

Now states also have a concept of "Joint Tenancy" this is similar to marital property but between two people who are NOT married. The key to Joint Tendency is the "Right of Survivorship" i.e. if one of you die the other joint Tenant becomes the sole owner of the property. Like Marital Property Joint Property can not be sold for the debt of one of the Joint owners. Please be careful there is a third type of Joint ownership of property "Tenancy in Common". In Tenancy in Common two or more people owes a piece of property together BUT UPON THE DEATH OF ONE TENANT IN COMMON THAT TENANT'S SHARE OF THE PROPERTY GOES TO HIS OR HER HEIRS NOT THE OTHER TENANTS IN COMMON. Such property CAN BE SOLD FOR THE DEBT OF ONE OF THE JOINT OWNERS.

I live in Pennsylvania where attachment of wages is NOT permitted (One of two states that prohibits attachment of wages, the other is Texas). In the other 48 states attachment of wages are permitted for debts, but under Federal Law any such attachments is limited to 25% of your gross pay AND you must be left each week with at lease 30 times the hourly minimum wage (i.e. $154.45). If your income falls below that figure attachment of wages is NOT permitted by Federal Law (Except for Child Support).

Just some tips on how to set yourself up to avoid having to pay a Judgment but before I do any of the above I would check with an Ohio Attorney to see what modifications of the above has been made by the Legislature of Ohio. Some states do not recognize Marital Property as a separate category from Joint Tenancy (West Virginia is such a State). Ohio does permit attachment of wages but it may have restrictions as to what types of Income may be attached and by whom. See your local lawyer for more.

Another way to avoid having to pay a debt is to make sure all of your property

[ArchTeryx]

7. Thank you!

I'm actually single, I should have mentioned that. I have very little in the way of confiscatable assets -- just a small IRA of low four figures -- and a few highly depreciating assets like my car and my laptop. And that's it. My net worth is highly negative due to the student loans.

I don't fear them taking my assets. They would get very little for what I had anyway. I fear them garnisheeing my wages. THAT would be the factor that forced me underground or to commit an act of fraud, more then any other. The IRS standards for 'livable' wouldn't even allow me to stay out of poverty here in in Columbus, let alone a city like Boston.

[happyslug]

8. Garnishment, That why I stay in PA

Pennsylvania does NOT permit Garnishment of wages except for my Student loans. Furthermore in most States that Permit Garnishment Child Support and Student loans have priority over other debts, i.e. if your wages are garnished for Student loans, that debt has to be paid off first before any other Judgment holder can garnish (Please note this is STATE law specific, i.e. each state is different, some states do NOT give Child Support payments priority over other debts).

I had a client whose student loans payments exceeded the 25% of his gross salary, what I advised him to do and he did was NOT pay the student loan, let them sue him and than garnish his wages. While Child Support can be more than 25% of your income, garnishment even for Student loans is restricted to 25% of your Income by Federal Law. Thus he was sued and a garnishment was set up, but the Monthly payment is less than the Student Loan holder wanted him to pay AND any subsequent Judgment holder has to wait till after his student loan is paid off (In about ten years).

Now, under the proposed Bankruptcy Reform, Support payments is equal to other debts but in most states (Pa is one) Support payments are SUPERIOR to other debts i.e. if your wages are attached for a Credit Card Debt and you are ordered to pay child support, the Child Support Order trumps the Credit Card attachment (Remember Child Support attachment can exceed 25% of your Income while other attachment can not).

Notice all of the above is dependent on your state's law on Executing on a Judgment (The Legal Term covering both Sheriff's sale of your property AND Garnishment of your wages), thus you should see an Lawyer who knows Ohio law i.e. a local Lawyer, a to how Execution of Judgments are enforced in your Area.

[Robert Oak]

9. illegal aliens tricks

Seems to me that Americans should try the same tricks as illegal aliens.

I have read reports that w/ fake social security numbers they get
Welfare benefits, Medicaid and are even buying houses from government programs.

I mean if the US isn't going to do anything about illegals why can't
Americans try the same tricks? If they can do it, why can't we?

In an underground economy, money under the table, no taxes, fake
social security number, obtain supplements in welfare benefits
plus are covered by Medicaid insurance. hmmm....