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Ohio hospitals increasing use of liens for medical debt

Unemployment, underemployment and credit card debt can create havoc on a household's finances. Another area of difficulty for many Americans understood by nearly any experienced bankruptcy attorney is medical debt. Medical debts can blindside a family.

The Canton Repository recently carried an interesting article on the increasing use of liens used by hospitals in Ohio related to medical debts. Over the past eight years, at least four Ohio hospitals have placed 2,603 liens on Ohio residences. The liens do not act like a mortgage. The hospitals do not have the authority to foreclose on a home due to the lien. The lien allows the hospital to collect from the proceeds of a sale if the house is sold in the future.

The hospitals have been filing lawsuits in court to collect on the debt. Once the creditor gets a judgment, which can also include interest, the creditor can file a lien against the debtor's home. The Canton Repository says the more than 2,600 liens placed on Ohio residences represent more than $8 million in medical debt.

But there is a wide range of debt owed in the individual cases. One of the liens against an Ohio homeowner reportedly is for a debt totaling $80. The largest lien involves a court judgment in excess of $165,000. Most liens are for less than $10,000.

One difficulty for many Ohioans is that they do not know the lien is there until they try to sell the home. Interest has stacked up. Many believe these "silent" liens are unfair. They also question the legitimacy of a public hospital taking a person's home equity through these silent liens by adding years of interest to what was originally a relatively modest medical bill. The hospitals, on the other hand, argue that the public expects them to run like a business but operate like a charity.

Medical bills unquestionably can lead to financial distress. When confronted with overwhelming debt, Cincinnati residents and others in Ohio can speak to an experienced bankruptcy attorney to learn what options in debt relief may be available.

Source: Canton Repository, "Hospitals 'lien' on patients for medical bills," Tim Botos, July 27, 2011

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