I have a $74,000 hospital bill. I called to see if I could get a discount since I was uninsured. I was told I needed to fill out a financial aid form to see if I qualified for financial assistance. Since my income is about $62,000 a year and I have about $10,000 in assets I am pretty sure I will not qualify. I also have more than enough in my IRA to pay this bill. I do not wish to do this. This form requires disclosure of all my financial assets. I am afraid they will use this info to set up high monthly payments or force me to use my IRA. My son has offered to help me pay this debt, but we can not afford $74,000. Maybe half that. Can you help?
You should consult a bankruptcy attorney, and look into the possibility of obtaining relief under either Chapter 13, or Chapter 7 of the bankruptcy code. Why is this hospital bill so high? Did you have medical insurance when you were hospitalized? The hospital will be unable to levy, garnish, or attach your IRA. Retirement accounts are exempt from creditor action under federal law. You can attempt to work out a repayment plan with the hospital, but the monthly installments will be too high for you to handle in all probability. Go consult a bankruptcy attorney about this bill, and about your finances in general.
The simple answer is that the IRA is itself probably safe from garnishment. The disclosure of it as an asset will probably be used in determining your installment agreement with the provider(s) if one can be reached. You may be eligible for a Chapter 7 bankruptcy to discharge the medical debt along with most if not all other debt. There are several questions to answer about all your assets, how many people live with you, your gross income for the last six months etc.
Alternatively, you may find the Chapter 13 a viable option. In Chapter 13 you propose a Plan that will use your projected surplus income (i.e. take home income less reasonable and necessary expenses, leaving some money left over each month) for 36-60 months to get rid of the debts.
So, for a very oversimplified example if your budget allows for $350 per month for the plan and assuming no secured debt treatment (13 cases have many options) and you do the full 60 month plan you would pay in $21,000. From this administration costs would be taken, say 8% leaving $17,774 for ALL unsecured creditor claims. If the ONLY claim is the one medical bill this would be paid roughly 24% at no interest. There are many variables that change the example and determine what you Plan will be, but the point is to take control over the debt and to pay back over time with what you can afford. To see if this option is good for you a consultation is mandatory. We offer free initial review. I have an office in Ypsilanti, though that is a hike for you. Your court would be in Flint which is not that far.
I hope this has been helpful. c
You should consult with experienced bankruptcy counsel in your area as to whether that is your best option. The attorney will need to know whether the IRA is one that you self funded, which is likely exempt, or inherited, which is not exempt and subject to liquidation in a bankruptcy.
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