Outstanding FREE Online Resource "SURVIVING DEBT" to read if you are struggling financially due to COVID-19 (or for any other reason)
The heroes at the National Consumer Law Center (NCLC.org) have made their comprehensive 50th Anniversary guide for debtors called “Surviving Debt” available at no charge for ANYONE.
This is an outstanding resource for ordinary folks who don’t want to try to read law books or statutes etc. It’s in clear, plain English. I have given away more than two dozen copies to friends and clients and it’s usually the first book I reach for when someone has a question about how to manage their debts of ANY kind.
While you isolate in place, if you are worried at all about your finances, take the time to read the first 10 short chapters and then the chapters for your type of debts. So you don't have to read it all -- just the first couple chapters and then the chapters that pertain to your type of problem.
(And if you yourself are able to make a contribution to NCLC, they would welcome it and put it to good use.)
Find it here: https://library.nclc.org/SD
Fellow consumer attorney Ian Lyngklip of Michigan produced this helpful video that you should watch if you are stressed about bills during work interruption from COVID-19.
Guide to Reducing Hospital Bills for Lower-Income Patients
by Andrea Bopp Stark
As described below, hospital debt poses a significant problem for millions of Americans. This article provides a nine step approach for lower-income patients seeking to eliminate or reduce hospital debt.
Medical Debt Is a Widespread and Serious Problem
More than 27 million Americans lack any health insurance—58% of low-income working adults, 44% of young adults, and 35% of Latinx adults. In addition, almost 50% of nonelderly adults have insurance that requires high deductibles and significant out-of-pocket costs. In recent years the number of Americans uninsured or underinsured has been growing.
As a result, a high number of families are burdened with medical debt:
As a result, there is an urgent need to address consumers’ medical debt problems. A detailed discussion is found in NCLC’s Collection Actions Chapter 9. This article provides a nine step approach for lower-income Americans to reduce or avoid their hospital bills.
Step 1: Don’t Prematurely Pay Even Part of the Hospital BillDepending on the state and the patient’s income, the bill may be waived in whole or significantly reduced—there is no benefit in making payments that may not be owed. Nor is there any downside in delaying payment:
Step 2: Determine If the Consumer Is Medicaid EligibleDetermine if the patient is Medicaid eligible. In some but not all states Medicaid coverage is retroactive to hospital bills incurred over the prior three months. Even where a state does not allow retroactive coverage, if the patient is found to be Medicaid eligible then at least for future bills they will have that source of payment for any follow-up treatment or other conditions.
Apply for Medicaid by going to www.healthcare.gov or calling 800-318-2596, or at the local public assistance office. Eligibility for Medicaid varies from state to state and depends on family income and may also depend on family resources. Some states limit Medicaid to certain groups of people, such as children and pregnant women. However, people in many states automatically qualify so long as their income is 138% of the poverty line or below. (In 2020 the income limits are: $17,236 for a family of one; $23,336 for a family of two; $29,435 for a family of three; and $6,100 for each additional family member. The poverty line is higher in Alaska and Hawaii.)
Sometimes children are eligible for Medicaid even if their parent is not. Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) requirements mandate coverage of a broad array of diagnostic, preventive, and treatment services for beneficiaries under age 21.
In addition to Medicaid, some states may offer other programs to help lower-income patients with healthcare bills. Ask the hospital financial counselor or patient advocacy organizations in your state for more information.
Step 3: Determine If a Hospital Is a NonprofitAs described below, a consumer has additional federal rights concerning a hospital bill if the hospital is a nonprofit 501(c)(3) entity, and additional state law rights may apply as well in a few states. To determine if a hospital is a nonprofit, go to the IRS website. In particular, go to the IRS tax exempt organization search page and search by organization name (under the drop down starting with employment identification number). The website will only identify if a hospital is a 501(c)(3) entity. If the hospital is not found, it may be that it is still nonprofit but under a different name (such as hospital’s parent entity) or the name has not been included in this database.
It is always wise to check to see if a hospital is a nonprofit even if it does not show up on the above website. Alternative methods of determining if a hospital is nonprofit include checking the hospital’s website, asking a hospital administrator, or talking to the hospital’s billing office.
Step 4: If the Hospital Is a Nonprofit, Understand Consumer Rights Under Federal LawThe Affordable Care Act (ACA) (also known as Obamacare) imposes certain requirements on nonprofit hospitals with 501(c)(3) IRS tax status concerning their financial assistance policies for low-income patients. Hospitals must create a written financial assistance policy (FAP) and a written emergency medical care policy. The financial assistance policy must disclose:
Step 5: Whether the Hospital Is Nonprofit or For-Profit, Understand Rights Under State LawUnlike federal law, state laws often specify standards for how much financial assistance a hospital must provide a patient of a given income level, and these state laws typically apply both to for-profit and nonprofit hospitals. But applicable state law varies significantly from state to state.
For example, ten states have enacted laws that require hospitals to provide a full spectrum of free and discount care for patients under specific eligibility standards, primarily based on income: California, Connecticut, Illinois, Maine, New Jersey, New York, Nevada, Rhode Island, Washington, and Maryland. On the other hand, five states (Hawaii, Montana, New Hampshire, Wisconsin, and Wyoming) have no financial assistance requirements. The other thirty-five states are somewhere in between.
Even among the ten states that have strong protections, there are differences. In Maine, all hospitals must provide free care for patients whose household income is up to 150% of the federal poverty level (FPL), but there is no discount care at all for those with higher incomes. Illinois on the other hand requires all hospitals to provide free care for those who are uninsured with family income of up to 200% of the FPL or up to 125% FPL for rural or critical access hospitals. But Illinois also mandates discount care for those with family income of up to 600% of FPL.
A number of states provide requirements only for nonprofit or state hospitals (Oregon, Texas, and Louisiana). Some states provide assistance directly from the state for hospital bills (Massachusetts, Colorado, and South Carolina). There are even more variations in other states.
Detailed state-by-state summaries of financial assistance requirements are available from two NCLC resources: NCLC’s An Ounce of Prevention: A Review of Hospital Financial Assistance Policies in the States (Jan. 2020) and NCLC’s Collection Actions § 9.4.3. An Ounce of Prevention includes eight appendices summarizing each jurisdiction’s type of financial assistance as well as who is eligible, the source of funding for the plans, and the statutes (if any) that mandate the assistance, which allows advocates and legislators to compare their state with the policies in other states.
NCLC’s Model Medical Debt Protection Act (Sept. 2019) provides language for a model state law mandating financial assistance for lower-income hospital patients. The model act specifies eligibility guidelines for financial assistance, provides specific guidelines for charity and discounted care, and includes procedural safeguards to protect consumers from aggressive or unfair debt collection practices.
A growing number of states have also enacted “surprise” medical debt legislation—at present about half the states have this legislation. Surprise medical debt laws limit bills from out-of-network physicians providing services at an in-network hospital. These laws address the situation in which a patient assumes their insurance covers care at an in-network hospital only to be surprised that an individual doctor’s bill at the hospital is not covered by insurance. There are also some state laws dealing with balance billing—where a hospital agrees to receive less than the full chargemaster price from the insurance company and then bills the patient for the difference. See NCLC’s Collection Actions § 188.8.131.52.
Step 6: Obtain the Hospital's Financial Assistance PolicyIt should not be difficult to obtain a hospital’s financial assistance policy (FAP). For nonprofit hospitals, federal law requires hospitals to:
The above requirements apply to nonprofit hospitals, but for-profit hospitals may use some of the same methods to publicize their policies. If all else fails, ask the billing office for a copy of any financial assistance policy.
Step 7: Compare the Financial Assistance Policy with State Requirements and the Individual Patient’s CircumstancesMany hospitals will have a financial assistance policy. Federal law requires every nonprofit hospital to have one, some states require all hospitals to have one, and even where a for-profit hospital is not required to have one by federal or state law, it may still voluntarily have such a policy. For example, Vermont hospitals have all voluntarily created financial assistance plans.
Compare the policy with any state requirements. In a shockingly large number of cases hospital financial assistance policies do not comply with state law. See NCLC’s Collection Actions § 184.108.40.206. Then compare the policy with the patient’s income and the type of care the patient received to see if the patient qualifies for assistance.
Step 8: Applying for Financial Assistance
After determining whether the patient’s income and family size qualify under the financial assistance policy, make sure that the hospital procedure is covered by the financial assistance policy. Some procedures such as cosmetic surgery may not be covered.
Next, find out how to apply for the assistance. The patient may have to provide a detailed budget, list of assets, information about family members, tax returns, or proof of income. Federal law requires nonprofit hospitals to explain in their financial assistance plan the procedure for applying for financial assistance. If the financial assistance plan does not fully explain the application process, call the hospital’s billing office for more information. Do not delay as many programs only give you about 240 days after the care or procedure to apply for assistance.
Federal law places certain requirements on a nonprofit hospital’s handling of an application for financial assistance, such as a denial cannot take place because of missing information not specified in the hospitals disclosure of application requirements. If a nonprofit hospital provides limited financial assistance without even reviewing an application for assistance, the patient still has the right to seek additional assistance. See generally NCLC’s Collection Actions § 220.127.116.11.5.
Step 9: If an Application for Financial Assistance Is DeniedIf a patient is denied assistance, some hospitals may have an appeals process. Pay attention to the time allowed for any appeal. There may be steps to preserve a claim for financial assistance.
If the patient ultimately does not qualify for assistance, some hospitals provide payment plans to pay off the debt over an extended period of time. But a patient should never agree to a payment plan that the patient cannot afford or that would prevent payment of other of the patient’s debts.
Hospital debt should be treated as a lower priority debt compared with rent, utility, mortgage and automobile loans, and most other forms of debt. Non-payment of that other debt will have serious immediate adverse consequences, while hospital debt may have little negative effect for six months (as described above) and it may be years, if ever, before a judgment is taken against the consumer for the debt. Also, hospital debt is unsecured debt that is fully dischargeable in bankruptcy.
When a judgment is taken against a patient, it will be important to determine the patient’s exposure to wage garnishment and seizure of bank accounts or other property. But some low-income patients may be totally judgment proof.
Be aware that under state necessaries statutes or common law doctrines a spouse may be liable for the other spouse’s treatment and a parent for children’s treatment. For more detail, see NCLC’s Collection Actions § 9.6.
Good Washington Post Article on How Car Dealers Rip You Off with Financing
Ian Ayres is the William K. Townsend professor at Yale Law School.
As websites such as Cars.com and TrueCar have made car pricing more transparent, auto dealers have turned to boosting their profits with hidden fees on loans.
When a consumer chooses in-house financing with an auto dealer, the dealer sends the customer’s financial information to a lender and is told the rate that the customer qualifies for. But it’s legal for the dealer to turn around and charge the customer a higher interest rate. You might qualify for a 5.9 percent interest rate, but if the dealer can get you to agree to a loan at 11 percent, the lender will kick back more than $1,000 to the dealership as pure profit. This discretionary markup of the interest rate allows auto dealers to arbitrarily increase their fees.
An analysis by the independent online auto-loan marketplace Outside Financial has found that dealers are charging an average markup of $1,791 per loan. By contrast, in 2003, Vanderbilt University economist Mark Cohen estimated that 10 percent of loans to Nissan’s borrowers were marked up more than $1,600. Now the average loan is boosted more than that.
. . .
Economists have had evidence for decades that car dealers tend to charge minorities higher prices. A series of studies I authored and co-authored in the 1990s found that auto dealers consistently charge black consumers prices that are hundreds or thousands of dollars more than their offers to white shoppers. These inflated prices can more than double the dealer’s profits compared with selling the same vehicle to a similar white customer.
. . .
The CFPB and other government agencies should be on the lookout for ways to better curtail dealership lending abuses. Yet instead of stepping up enforcement and protecting customers, the CFPB has rolled back rules on discriminatory lending practices and decreased enforcement of existing protections. Just last year, the Senate used the Congressional Review Act to overturn a CFPB rule that explicitly banned auto lenders from charging discriminatory fees on the basis of race. . . .
Turns out I'm not alone in recognizing that most used car dealers (not all, but most) are really just shady payday lenders disguised as merchants.
But I've been too optimistic!
Below is a quoted comment from an auto industry expert in the midwest. And this ins't me talking or another consumer attorney. This is a car industry guy talking - someone who helps dealers!
BHPH = "buy here, pay here" -- the classic small independent car lot.
He warns that even the big chain used car places have the same practices!
For used car dealers, the car is just the bait for the important part -- selling you an outrageous loan and optional "extras" that give the dealer much more profit than the car ever could. (Because, think about it -- the only reason 99% of the customers step onto the lot at one of these places is that they have such poor credit that they have to buy the car that someone else felt good about getting rid of.)
With the horrible increase in economic inequality in the US, this isn't going to change anytime soon.
But at least understand what you're dealing with -- if you feel like you have to buy a used car from a dealer, do everything possible to GET YOUR OWN FINANCING first, before you get anywhere within 100 miles of a dealer. Know what you are approved for IN TOTAL as well as in weekly or monthly payments, and walk away the minute the dealer tries to sell you financing.
Dealers are pushing out financing terms to absurd lengths to make used cars "affordable," but that just puts you into a negative equity trap (you owe much more than the car is worth) at trade-in time ... if the car even lasts long enough for a trade to be possible.
Bankruptcy Exemption Limits (what you can keep) Amounts Going Up
Clear proof of Lily Tomlin's saying that
"No matter how cynical you get, you can't keep up."
Attorneys for Wall Street and bottom on the barrel debt collectors alike are trying to get out of having to follow federal law that protects consumers by limiting the kinds of tactics that collectors can use.
Right now, the Fair Debt Collection Practices Act covers debt collecting attorneys the same as all other debt collectors. Lawyers for the collectors are trying to give themselves an immunity shield so that they can go back to using these abusive tactics without fear of being held to account by consumers.
If anything, by virtue of being attorneys, attorneys who collect debts should be held to a HIGHER standard, not allowed to break the law with impunity.
Let your congressional representatives know that you
OPPOSE ANY EFFORT TO EXEMPT ATTORNEYS FROM THE FDCPA.
Here's the text of an alert on the subject from the National Consumer Law Center. The complete text with end notes is at the end (click on it below to download file).
A bill pending in the U.S. House of Representatives, H.R. 5082, Practice of Law Technical Clarification Act of 2018 (Mooney-Gonzalez) (amending the previously filed H.R. 4550), would exempt attorneys and law firms engaged in litigation from the Fair Debt Collection Practices Act (FDCPA) and eliminate Consumer Financial Protection Bureau (CFPB) authority over them.
I am not a bankruptcy attorney, but I have helped many clients understand when they should look into bankruptcy and when there is no need for a bankruptcy filing because the clients have no assets that creditors can reach. If you are concerned that you are drowning in debt and don't know a good bankruptcy attorney to consult, you can make an appointment with my assistant and discuss your situation; I will be happy to refer you to good consumer bankruptcy attorneys if we decide that bankruptcy is appropriate for your situation.
Below is another article in the terrific series by the National Consumer Law Center on this important subject.
Deciding Whether to File for Bankruptcy: Consumer Debt Advice from NCLC
John Gear Law Office -
LAWYERLY FINE PRINT:
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