The collection of Medical debt is covered under the Fair Debt Collection Practices Act. This means that medical debt and those who collect on them fall under the Federal Fair Debt Collection Practices Act. The Federal Fair Collection Practices Act applies only to collectors working for professional collection agencies and to those attorneys who are hired to collect debts. Texas Law addresses actions taken by anyone trying to collect on a consumer debt. A collector who is attempting to collect on medical debt may contact you in person, by mail, telephone, telegram, or fax. The medical debt collector may not contact you at inconvenient times or places, such as before 8:00 a.m. or after 9:00 p.m., unless you agree. The medical debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts. The statute of limitations is four years in Texas on the breach of contract, thus the medical debt collector has four years to sue and get judgment. Judgment on medical debt is like judgment on any other debt and all the remedies available to creditors there are also available in medical debt cases that have been reduced to judgment.
Should your debt to the hospital has been incurred because of injuries for which you can obtain compensation from another person, then Texas Law allows a lien to be placed on the compensation that you would receive in the future to pay the hospital . The Texas Hospital Lien Statue sets limits on hospital charges. Tex. Prop. Code Ann. § 55.004 regulates the maximum amount of charges a hospital can place under a lien. A permissible hospital lien is for the amount of hospital services provided during the injured individual’s first 100 days of hospitalization. Also, the Federal government has a statutory lien for medical benefits paid under the Medicare Act. 42 U.S.C. §1395y(b)(2)(B)(ii). The government has a direct-action right of recovery against benefit recipients, their attorneys, and third-party payers. This could include a settling defendant and, perhaps, a settling defendant’s attorney if funds are disbursed from the attorney’s trust account. If one is aware, or “should be aware” of the lien, then it is perfectedeven when no notice of the lien has been given. 42 C.F.R. §411.24(l)(2). Medicaid is a state-administered, Federal program designed to provide medical care to the needy. 42 U.S.C. §1396k(a)(2). In Texas, the Medicaid administrator has a direct cause of action to collect unpaid benefits from personal insurance, a person whose wrong caused the injury, and other sources. TEX. HUM. RES. CODE ANN. §32.033(a) & (d).
Filing a bankruptcy can stop the collections of medical debt. You will eventually get a discharge. By obtaining a discharge, this means that the medical debts do not have to be paid back, but should a lien exists on any type of judgment or settlement that could be coming, then the lien would survive and the debt would be paid out of the proceeds of the settlement.
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