Nonprofit Hospitals Sue Their Poorest Patients

Posted on Jan 05, 2015 By Ron Sykstus

Attorney Ronald SykstusEven the smallest medical debt can have a severe impact on individuals and families. This is even more so the case if a patient is being collected on or even sued for the medical debt. In the worst case situation, even non-profit hospitals sometimes sue their patients, even though they have a tax mandate to help treat those less fortunate. NPR  recently reported on this.

In Alabama, the problem with getting behind on even the smallest medical debt is that it will result in collection and, often times, collection harassment. In turn, this will result in derogatory information provided by the credit furnisher to the credit reporting agencies. This then reduces that patient’s credit score  and credit standing. As a result, borrowing becomes even more difficult.

A more severe problem develops if someone is sued over a medical debt. Not only does that damage the credit further, but rarely is there a defense to fighting medical debt lawsuits, especially if they have not been bought or turned over to a third-party debt collector. If it is the original medical provider that is suing a former patient, the result is most often a judgment against the patient. With this judgment, the medical provider can do several things. First of all, it can garnish wages in the state of Alabama and take up to 25% of a person’s take-home pay. That garnishment will remain in place until the debt is paid in full.   Additionally, a medical provider who gets a judgment against a former patient can record it as a judgment lien in the probate office of where the patient owns real property. This judgment lien will serve as an encumbrance on the property and grow at a rate of at least 12% interest per year and is good for up to 10 years and then renewable for another 10 years beyond that. As a result, in addition to the credit damage, the lawsuit that turns into a judgment will have far-reaching consequences on many fronts.

Our lawyers have a great deal of experience in helping people with debt, lawsuits and judgments. Please feel free to contact our office nearest to you to set up an appointment if you would like to discuss your situation with one of our lawyers.  Additionally, please feel free to read these blog posts that address these various topics