Individual Bankruptcy and Joint Medical Bills

[enigma1977]

What is the name of your state (only U.S. law)? Kansas

I apologize in advance for the long question, but I wanted to make sure to give all the needed information.

I am married, I just filed for bankruptcy, my husband did not file with me. I listed a medical bill on my bankruptcy, a bill that is actually in my husband's name, because I considered it to be a joint debt- most of the charges are for my kids and myself. The bill is in his name because the insurance was through his employer at the time.

Today my husband got a letter from a collection agency on that medical bill. When I called the medical clinic to make payment arrangements directly with them, (because I was under the impression that the bankruptcy would not affect the debt), the lady in the billing office at the medical clinic said she would call me back after she had talked to the collection agency. Apparently, the collection agency confirmed what the lady at the doctor's office already thought- that they could no longer try to collect the debt against my husband, even though it is in my husband's name, because I listed the debt on my individual bankruptcy. I made sure she knew that I was the only one who filed bankruptcy, and asked if they were going to continue to pursue my husband after the discharge, and she said no, that legally they couldn't.

This makes no sense to me. I thought that medical bills were a joint debt, and that filing bankruptcy without my husband would simply leave my husband 100% responsible for the medical bill- especially since the bill was not in my name. My bankruptcy attorney told me that my husband would be responsible for the debt when I had my meeting with him, so now I don't know what to think. Are the medical clinic and the collection agency both wrong about this? Now, I'm not going to argue with another $5,000 bill going away, but I just want to be sure that they are right before I go getting all excited.

Thank you in advance for your advice.

[bigun]

Some creditors have a policy of not pursuing debts that were included in bk. Reason being, if they're wrong the downside can be signficant if a federal judge gets involved with sanctions involving violating the permanent injunction against collecting discharged debts.
Sounds like the collection agency may have such a policy and is returning the debt to the provider.
Talk with your lawyer if you need some clarification but, I'd not poke a stick at this thing and remind them again that it wasn't your husband that filed.

[enigma1977]

Right after I said that, I was thinking I might have stuck my foot in my mouth... I'll keep it shut and hope the bills don't start coming again. Thank you for the advice!

[latigo]

Enigma:

You didn’t “stick your foot in your mouth”. Bigun did the honors!

That is unless you are so naïve as to accept his/her prophecy that as with “some creditors” these doctors - who normally feel cheated by society if they don’t net a minimum of $500K per annum – are going to allow this $5K to slip through their fingers simply because they received the notice of the bankruptcy filing!

The clinic may have a greenhorn bookkeeper, but you can be assured that its accountants and attorneys are not so stupid. The clinic WILL file a creditor’s claim in your bankruptcy! The clinic WILL go after your husband!

ITS RIGHTS AGAINST THE HUSBAND AREN’T CURTAILED BY THE 362 AUTOMATIC STAY ORDER! NOT IN THE LEAST!

Regarding your bankruptcy filing in general.

Did this attorney of yours explain the complications arising from your husband not joining in the petition, UNLESS:

1. All the creditors affected by your petition represent your sole and separate debts. And that means totally apart from any contractual and/or statutory/marital/vicarious liability on the part of your spouse.

(But how could this possibly be in a marriage of any appreciable duration? Not to mention your use of the plural in “joint medical BILLS”?)

2. That you and your husband share NO ownership interest in ANY assets WHATSOEVER. And that all of the property that you’ve declared in your sworn bankruptcy schedules represent your sole and separate property, free of any right, title or interest in your husband.

(If that is your declaration to the court, then you can expect the Trustee to take a hard, detailed look at everything both you and your husband have acquired.)
_____________________

Did your attorney make you aware that, in addition to your income, the income of your husband will be included in determining YOUR disposal income for purposes of a Chapter 13 repayment Plan?

Because the only way you are going to escape a Chapter 13 (and tied down to a 36 month repayment plan) would require a finding by the Trustee (based upon your sworn statement of monthly household income and expenses) that there is NO DISPOSABLE INCOME over and above those approved expenses with which to fund a Chapter 13 Plan.

And the reason that seems unlikely is due to your admitted effort to set up a deferred payment schedule with the clinic.

It would be most interesting to see how the Trustee, your attorney and the attorney for the clinic work around these “JOINT MEDICAL BILLS” with you attempting to erase them from your column - the husband remaing100% liable and yet his payments towards those will be considered as an item of your household expenses.

Knowing no more than you’ve given here, I think you made one big mistake. But have fun in bankruptcy court.

Sax

[GaAtty]

You are misinformed with regard to your statement that the medical bill was a "joint debt If the medical bills were a "joint debt", your name would be on the bill. You are not in a community property state. Therefore, the bills with his name on them are his. The bills with you name on it are yours. The attorney should have told you this. There was no reason to include this bill as one of your bills on your bankruptcy, since you were not legally responsible for it.

[latigo]

Originally Posted by GaAtty

You are misinformed with regard to your statement that the medical bill was a "joint debt If the medical bills were a "joint debt", your name would be on the bill. You are not in a community property state. Therefore, the bills with his name on them are his. The bills with you name on it are yours. The attorney should have told you this. There was no reason to include this bill as one of your bills on your bankruptcy, since you were not legally responsible for it.

With all due respect, to assert that debt incurred during marriage (medical or otherwise) is not a joint and several obligation unless each husband and wife are named on the account is an absurd misstatement of the law – Kansas or elsewhere.

FURTHERMORE, if in Kansas the husband is NOT personally liable for the wife’s medical expenses then explain the decisions in the Kansas court cases Kelley v. Lees, 461 P.2d 806, 810 (Kan. 1969) and Topliff v. Gross No. 94-1415, 1997 WL 321291 and in Myers vs. Foltz, United States District Court District of Kansas, Case No. 08-CV-2312 JWL/GLR where the husband was allowed to recover from a third party medical expenses “he incurred as a result of the wife’s injury.”

And in Hinson v. Titan Tool, Inc., No. 93-1370, 1996 WL 473873, (D. Kan. May 31, 1996) where the wife was allowed recovery against a third party the value of her nursing services provided to her injured husband.

It doesn’t take an extensive legal education to know that if the Kansas husbands were NOT personally liable to the care providers for medical services rendered on behalf their wives THEY WOULD NOT HAVE A CAUSE OF ACTION AGAINST THE THIRD PARTY!

The fact that Kansas does not follow community property law has nothing to do with the issue.

Sax

[enigma1977]

Ok, I guess I should clarify a few things:

To GaAtty- I thought it was strange too at first, but here's what happened. I told my attorney that the medical bill was in my husband's name only, but he then asked if I might have any responsibility at all for the bill. I then explained that before we were married, I had an account at the clinic and my then boyfriend had an account at the clinic. When the clinic got a new computer system (after we were married), the clinic consolidated our bills because we were then at the same address and we had all started coverage under my husband's insurance. So some of the charges were not my husband's. Because of this, my attorney said it would be best to list the medical bill- even though it was in my husband's name.

To latigo-
1) My husband did not file bankruptcy with me because he filed 5 years ago when he got divorced from his first wife. Otherwise he would have filed with me.
2) I don't have a job (can't get one in this market because I have no work experience after college), and my husband doesn't make much money. My statement of income and expenses shows a disposable income of 13 dollars a month. I was calling the clinic to see if they would accept 10 dollars a month until we get back on our feet because the collection agency they were using was threatening a lawsuit against my husband. I called them because I was desperate to avoid a garnishment. We have a hard enough time buying groceries as it is.
3) All the other debts I listed were credit cards (collection agencies) that were in my name only and one medical bill that I incurred before I was married, also in my name only.
4) We don't have much in the way of assets. We rent a house, we don't have anything extravagant, and between the two of us we don't have enough assets to earn $1500 if we sold everything we own at a yard sale- even if we also sold everything our kids own.
5) I am already nervous enough about this whole process, especially the 341 meeting. Why would you say "But have fun in bankruptcy court" like that? That was just hateful. I was not trying to be dishonest or rip anyone off. But because we still have all the debts in my husband's name and no clue how we're going to pay them off after my bankruptcy is over, I was sure hoping that bigun was right about that one medical bill being something we might not have to worry about.

Thank you to everyone for your advice. I truly appreciate everyone who has taken time out from obviously busy schedules to answer my question.

[bigun]

You're not going to have any issues with your bk. Many people file separate from there spouse with no problems.
The only advice I'd offer is, redouble your efforts to find work. If it's a job at WalMart or McDonalds-at least it's a paycheck. You still have to support yourself post bk. You don't want to file bk and get discharged and still live paycheck to paycheck.
You might try [url=http://www.bkforum.com]Bankruptcy Forum[/url]
It's likley the most active bk site on the net. Several forums on dealing with life post bk that may be of interest.

[enigma1977]

Thank you so much bigun- I will do that.