Can a hospital take a deceased person’s home from the spouse for unpaid medical bills?

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Can a hospital take a deceased person’s home from the spouse for unpaid medical bills?

Example: a terminally ill patient is in the hospital and the medical insurance quits paying for whatever reason. There are still unpaid medical bills to be paid after the patient dies. Can the hospital foreclose on the home to collect the debt? The home is in both the deceased and the surviving spouse’s name.

Asked on September 17, 2012 under Estate Planning, Kentucky

Answers:

Catherine Blackburn / Blackburn Law Firm

Answered 8 years ago | Contributor

The answer to this question depends on the state in which you live.  In Florida, there are two reasons why a hospital could never take the house.  First, the Florida constitution has a special protection for a person's homestead -- it cannot be reached by creditors (except, of course, a mortgage company that loaned money with the house as collateral).  Second, in Florida, assets owned jointly by a husband and wife are held as "tenants by the entireties," and a creditor of only one spouse cannot take assets held by both spouses jointly.

I do not know your state, so I cannot say what protections apply there.  Even if your state has no protections for a homestead or for assets held by a husband and wife, a hospital would have to sue in court and obtain a judgment before it could "execute against the house" (i.e., take the house).  In addition, if the house has a mortgage, the mortgage company would be paid before the hospital.  This often makes creditors think twice before trying to take someone's home.  Finally, bankruptcy remains an option before losing the home.

Let me add something about medical bills.  Medical providers, especially hospitals, almost always charge much, much more than is reasonable.  Medicare, Medicaid, and insurance companies never pay what the hospital bills.  If you do not have health insurance, or health insurance does not pay for whatever reason, it is a good idea to consult a company that can help you negotiate medical bills. Even though they charge a percentage of what they save, they can often save you thousands of dollars off the bills.


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