{"id":2367,"date":"2022-07-25T11:00:00","date_gmt":"2022-07-25T15:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2367"},"modified":"2024-04-25T23:18:43","modified_gmt":"2024-04-26T03:18:43","slug":"hospitals-use-deeds-of-trust-to-bully-cash-strapped-patients","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/hospitals-use-deeds-of-trust-to-bully-cash-strapped-patients\/","title":{"rendered":"Hospitals Use Deeds of Trust to \u201cBully\u201d Cash-Strapped Patients"},"content":{"rendered":"\n
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Hospitals Vs. Homeowners<\/figcaption><\/figure>\n\n\n\n

Lawmakers in North Carolina hope to provide financial protection for hundreds of thousands of people in medical debt. Medical debt is not only the leading cause of bankruptcy, it turns out. It can actually lead to the loss of homes.<\/p>\n\n\n\n

How can patients\u2019 financial safety be guarded? A bipartisan bill in North Carolina called the Medical Debt De-Weaponization Act <\/em>aims to do it. If it passes, it will make the state a leader in dealing with medical debt practices.<\/p>\n\n\n\n

Here\u2019s the story.<\/p>\n\n\n\n\n\n\n\n

Deed of Trust as a Claim to Home Equity<\/h2>\n\n\n\n

Terry Belk and Sandra Belk co-owned their North Carolina home. Each had a personal struggle with cancer. Insurance didn\u2019t cover all the costs. They couldn\u2019t pay the balance.<\/p>\n\n\n\n

Terry Belk reported being \u201cbullied\u201d by the hospital company\u2019s lawyer. And in 2005, Terry and Sandra signed a deed of trust, securing the home to the hospital debt for Sandra, who would die in 2012 from metastatic breast cancer. The deed of trust gave the company a claim against the title, for $23,311 in home equity.<\/p>\n\n\n\n

Medical groups regularly file legal actions against people to collect money from unpaid or underpaid bills. Unsurprisingly, the debt collectors tend to hound people like the Belks \u2014 members of minority groups<\/a> and people with modest incomes. Also vulnerable? People who live near health hazards. In the 100 U.S. counties with the most residents suffering from ongoing illnesses, about a quarter of the adult populations also suffer from the crushing impact of medical debt on their credit profiles.<\/p>\n\n\n\n

All the while, medical companies are pulling in large profits. In North Carolina, lawmakers believe more of that revenue should be redirected to assistance for patients who aren\u2019t able to cover their medical costs.<\/p>\n\n\n\n

Essentially Turning Owners Into Renters<\/h2>\n\n\n\n
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A former leader of the local NAACP, Terry Belk isn\u2019t one to suffer in silence forever. After years under pressure, Belk contacted investigative reporters with the local television station WBTV.<\/p>\n\n\n\n

The news team uncovered five more deeds of trust recorded with the Mecklenburg County Register of Deeds on various homes \u2014 all by the same corporation that went after the Belks. That adds up to six different households, their titles clouded by debt. None will be able to sell their homes without satisfying the medical and debt collection corporations.<\/p>\n\n\n\n

The investigation further uncovered a slew of court judgments that became liens on titles<\/a> \u2014 connected with debts owed to the very same medical company.<\/p>\n\n\n\n

All this legal targeting, Terry Belk told the news station, allows a medical corporation to essentially treat patients as renters. Any company that places a deed of trust or lien on a home can force a debtor to pay up or sell the house. Given this pricey real estate market, that\u2019s not a far-fetched concern.<\/p>\n\n\n\n

A recent Kaiser Family Foundation poll indicates that medical bills are a factor in millions of U.S. residents\u2019 evictions and foreclosures.<\/em><\/strong><\/p>\n\n\n\n

Since Terry Belk called them, the news reporters have found more than 100 medical debt lawsuits<\/a> filed against people last year by this same company.<\/p>\n\n\n\n

Downward Spirals<\/h2>\n\n\n\n

A medical judgment often leads to a downward spiral, with years of interest, attorney fees, and damage to the debtors\u2019 credit scores all in play. It also leads many patients to live in fear of losing the roofs over their heads.<\/p>\n\n\n\n

Some of them request forbearance from their mortgage companies. If that doesn\u2019t work, another way out of a medical debt lien is through a bankruptcy filing. Indeed, one in every eight adults with medical debt have been forced into bankruptcy, according to Kaiser Health News<\/em>.<\/p>\n\n\n\n

Sometimes, bankruptcy is the only way to stop that spiral. It can result in a payment plan to satisfy the lien \u2014 in some cases, with a partial discharge of debt at the end of the schedule.<\/p>\n\n\n\n

Under increasing scrutiny, the three major credit agencies just this year announced they would remove paid-off medical debts from their scoring systems. They also promised to stop figuring minor medical debts (under $500) into credit scores. What about major medical debts, though? A torpedoed credit profile can keep a person in poverty with no way out.<\/p>\n\n\n\n

Status of the Medical Debt De-Weaponization Act<\/h2>\n\n\n\n
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The Medical Debt De-Weaponization Act would force North Carolina\u2019s hospital companies to work with patients in need. Among other things, it would:<\/p>\n\n\n\n