How to Protect Your Assets from Medical Debt in Massachusetts

Medical expenses often build up quickly after an event you couldn’t have foreseen. Having a good health insurance plan can help you minimize this debt, but they don’t always protect you from possible fees. If you go through a period of being uninsured and incur medical expenses, things can look dire quickly.

If you feel like you’re drowning in medical debt and you’re not sure what to do, take a deep breath. Debt is always scary but there are actions you can take to protect yourself and your assets. Today, we’ll share everything you need to know about protecting your assets from medical debt in Massachusetts so you can get back on your feet as soon as possible.

What can I do to manage medical debt?

The first thing you need to consider is that medical debt should be the lowest debt on your list of priorities.  Debts like a mortgage should take higher priority than medical debt, and you should never pay medical debt off by getting into further debt, i.e., using a credit card.

In most cases, medical debt is less pressing as it generally comes with little to no interest or late charges, meaning you can leave it unpaid without adding to the amount, unlike other types of debt. The problem comes when medical providers sell your unpaid debts to a debt collector, but you don’t need to panic in that case, either.

Remember, debt collectors will push you to settle the debt in any way you can. If you have some cash on hand to pay it off, try negotiating with them. In many cases, they’ll accept a payoff for drastically less than you owe.

First, check your bill – and don’t be afraid to query it

One of the easiest things to do is to check your medical bills to make sure that they are accurate. If it’s not itemized, make sure you get one that is. More often than not, you will find an error on your medical bill, such as duplicate charges or charges for a treatment you never received. If you are unsure about a charge, make sure to ask your medical provider to go through it with you.

Don’t be afraid to do this – plenty of people have asked what something on their bill means, only for it to magically disappear. (Which literally happened to this Reddit user when they queried a charge.)

If you do not find any errors within your medical bill, you may be able to negotiate a lower charge. Hospitals are familiar with patients looking for a discount on their bills so it is always worth asking, especially if you explain your current financial situation. For example, this Reddit user negotiated to cut his bill from $756 to $151, and another paid $1,355 instead of $7,000 – you’ve just got to call and try.

At the very least, your medical provider should be able to offer you a more manageable payment plan, with lower monthly payments and low- or no interest. Fight for yourself or find a compassionate friend or family member who is able to help you do so if you’re unwell or stressed.

Can medical debt cause me to lose my home?

It is possible to lose your home due to medical debt, but it is not common. A creditor will not typically take you to court unless they are sure that you cannot, or (in more cases) will not pay your medical bills. If you cannot pay but are responsive, they usually won’t take things far unless they feel you are trying to dodge them unjustly.

If your medical provider wins the court case, they can take money from your wages or bank account, and they might even be able to take a claim to your property, effectively forcing you to pay your medical bills or risk losing your home. Again, this isn’t likely (wage garnering is much more common), but it is possible.

What can I do to protect my assets from medical debt?

If you are seriously worried about your assets being seized to pay for medical debt, you can take out an irrevocable asset protection trust. This means you will not be able to amend the trust, but it will protect your assets from any creditors.

Any assets in this trust are legally owned by the trust, managed by a trustee, with the documentation outlining how the assets can be distributed and used. To ensure that your assets are wholly protected, the trustee is not allowed to give the core assets to you.

To set up this trust, you’ll need a trustee and at least one beneficiary – essentially, it’s like arranging your will early. If you’re young, this may not be the best route for you, since it is (as the name suggests) irrevocable. You also need to consider that you’ll lose control over your assets – you must make sure that your trustee is someone you would trust with your life.

If you choose to put your assets in an irrevocable trust, make sure you work with a trusted attorney.

Other Options

If you are struggling to make your medical bills more manageable and you don’t want to put your assets in a trust, your other option is to liquidate your assets before they can be seized by your creditors to pay off your debt. This can give you the ultimate freedom – allowing you to wipe out your debts and start with a clean slate. There’s no greater feeling of freedom than not owing anyone money after months or even years of stress and pressure from debtors.

While selling your home on the market can be a stressful and time-consuming endeavor, you can consider selling your home to a cash home buying company like us. We buy homes in Massachusetts regardless of condition and we often go from offer to sale in just 2 weeks. If you’re looking to get the money you need to buy your freedom, there really is no better way.

We’re Here to Help

If you are eager and ready to get the creditors off your back and sell your property fast, we can help. Pavel Buys Houses will purchase your property in Massachusetts, no matter what condition it is in to provide you with the money you need as soon as possible. To get advice and your free, no-obligation cash offer, contact us now.