Cash Advance For Medical Payment

[danaf]

How is a cash advance viewed by the trustee/courts for medical payment?

[HHM]

Again, the Trustee and Court, DO NOT CARE about cash advances, the only party that cares about cash advances and what not, is the creditor affected by it, (i.e. the the creditor you are going to, essentially, screw over).

The BK trustee ONLY cares about getting money to pay your creditors, the US Trustee only cares that you meet the qualifications to file the particular chapter of BK that you are filing and that you are not hiding assets.

In the scheme of things, he medical payment will probably not be considered a luxury expense (unless we are talking about botox injections, or something similar), so the charge will probably not be an issue.

But, incidentally, why pay it as a "cash advance", why not just charge it as a normal credit card charge.

[Bandit]

But, incidentally, why pay it as a "cash advance", why not just charge it as a normal credit card charge

.

Mostly because it does not work that easy. If someone is going through 6 months or a year of medical issues, seeing many Doctors, then a cash advance offers a lower interest rate, say 0% for one year. To charge 5,000 by swiping you pay 21% interest. This rate/payment will eat the person up before he can see all the Doctors and risk not being able to be helped by the Doctors s/he needs to see in the future. The higher the interest, the higher the minimum payment. The lower the interest the lower the payment and will be able to stretch out the credit much longer.
For example, 2,000 swiped is a payment of 60.00 a month. You can cash advance 6,000 and the payment will be the same. If you swipe 6,000 the payment will be well over 100.00 closer to 200. You have to be conscious about this when you have a long term or even a short term medical problem. Other unexpected complications can arise during the treatments where you will need to see other Doctors and so on and so forth.

Fortunately I had one card that offered me 0% just before my accident including purchases and that is the one I used first, otherwise I would have been going to the county clinic and I would already be at my ropes end knowing I have 2 more Doctors and about 4 more months of issues.

I have another card offering 0% and I asked the creditor if I can write the check straight to the Doctor and she said "NO". She said I had to deposit it to my account then write my own personal check to pay my Doctor.

It is not as easy as just going to Sears for dental cleaning when you have serious medical problems.

the only party that cares about cash advances and what not, is the creditor affected by it, (i.e. the the creditor you are going to, essentially, screw over).

I do not think this (swiping) is the right approach. If there are medical problems then the person MUST stretch his credit for as long as possible and getting the best rate & putting down the least down payment is important. This means he cannot just stop paying his credit cards as some others in a non medical situation can do because he needs them for a long time to get through this.
Otherwise the patient will not be getting the future treatments they need if they run out too fast. Some hosptials and Doctors today also refuse patients who do not have insurance and send them to the county clinic UNLESS they put down a huge deposit first.


Now, if someone is going to do a cash advance for the same rate as swiping, then I would agree that it is pointless and you may as well swipe the card. I will be at 3 months soon & the point where I am at because all my 0% cards have been used and now I have to use the high interest ones. This helped me get by 3 months longer with much lower payments by doing it that way.
Make any sense now?

[Bandit]

How is a cash advance viewed by the trustee/courts for medical payment?

I don't know if it is a good to idea to do this often. Maybe once in the beginning. Like HHM said, it will be the creditors that would be coming, objecting or asking questions about what you did with the cash.

I know they have this whole thing set up funny because the CC do not want us using cash advances to pay Doctors unless we take the cash into our own hands they will not let the courtesy checks for advances through in some cases. It is like they want us to use the high interest no matter what.

If it were me, I would write the personal check to the Doctor and put a note on it that shows what you did, if you do that so you can prove where you sent the advance if the creditor comes asking you.

It is kind of like paying off a secured loan with a CC...Banks wont do it that easy.
I also took out a cash advance to pay my friend back for the amount he gave the hopsital for my surgery. I am sure they will not like that either though I can show exactly what happened if they ask because I put the numbers of the hospital bill on my personal check.

Hope that helps.

[HHM]

The only faulty assumption is that you are "assuming" these are no interest cash advances, we don't know that yet. (by the way, the "screwing over" comment is related to the fact that BK is apparently inevitable for danaf, I did not mean it in a derogatory sense, only a factual sense in that danaf is going to take this cash advance barely pay it, or not pay it, and file BK).

In any event, bandit makes some good points about dealing with medical issues prior to BK. You want to hold off filing BK as long as possilbe and try to keep your credit afloat if the medical issue is going to take a while to resolve and involve many doctor visits and treatments.

But, taking the cash advances is of little concern to the Trustee.

[Bandit]

The only faulty assumption is that you are "assuming" these are no interest cash advances, we don't know that yet. (by the way, the "screwing over" comment is related to the fact that BK is apparently inevitable for danaf, I did not mean it in a derogatory sense, only a factual sense in that danaf is going to take this cash advance barely pay it, or not pay it, and file BK).

In any event, bandit makes some good points about dealing with medical issues prior to BK. You want to hold off filing BK as long as possilbe and try to keep your credit afloat if the medical issue is going to take a while to resolve and involve many doctor visits and treatments.

But, taking the cash advances is of little concern to the Trustee.

Absolutely agreed. Some people think they can charge/cash advance to pay off the medical bill for relief, but this will sink them within a month. There are better alternatives than charging/cash advance such as negotiating a small payment per month with the Doctor. The CC is not going to negotiate the payment but the Doctor will as he continues to help the patient. There is no way to get around the down payment to begin services and that is where the cash advance/CC is needed. Mine is doing an automatic $30 a month to my CC which is way better than putting the whole 30,000 on the CC at once. In that case even a 0% interest is not going to relieve.

I have a question about this on the OP. If the creditor does object to the medical debt charges/cash advance in BK (though doubtful), who else would be involved besides the creditor and the person filing? Is it their own attorney?

[HHM]

There is one consideration in deciding to charge the medical tx on a CC vs negotiating with the Doctor...if BK is inevitable and you like your doctor and plan on using that doctor again, you do not want to file BK against the medical bill directly. (granted, most major medical practices have insurance against non-payment, but still...). Generally speaking, if you file BK against a Dr. or private medical facility, they will likely refuse to treat you in the future.

Thus, in that scenario, you are better off charging the medical tx to a credit card.

Also, keep in mind, you cannot pick and choose which debts to list in your BK, so you cannot choose to leave your medical bill off your petition.

[Bandit]

I understand.

In the beginning of treatments and along the way I would never do it that way. I almost made that mistake by charging (paid in full) up front and along the way then everyone told me NOT to throw it all on a charge card as the bills come in.

Negotiating during the treatments is better IMHO and keeps you on track longer. Later if you see that there is no way out and BK is the only option, then charging the balance and paying in full toward the end is better than trying to keep up with it as it goes along.

Remember, you do not know how high the medical bills are going to get and if credit runs out you still have to file on the Doctor bills. It is not the same as negotiating sticker price on a car.

There is one Doctor who I have had for a long time and he will get paid in full first. The only problem is he is the last Doctor I have to see to finish all of this. To avoid running out of credit and make it back to him, negotiating with these other guys is better. This doctor has taken me in on two serious occasions in the past for problems and never charged me a penny.

It gets more difficult when you have more than one Doctor to pay.

My first surgeon has been really good as well and already told me he would still see me and offer therapy even if I cannot pay the balance. The last 4 visits he has charged me 0.00 to spend a half hour each time with me. He also told me prior to surgery he would do the surgery even if I could not pay for it all. It is better to negotiate IMO if you have a Doctor who really cares and is not just in his field for money. I do mean talk with them about it all and be honest and not ignore the bill. If you do end up going BK, then I agree to pay them in full by CC,k if you can. Along the way and when the credit runs out, The bank is not going to do this because they do not care what caused the problem and you may also still be stuck with a balance on the medical bill. One less problem I really do not need.

I spent the first two weeks in bed sorting this all out and trying to figure out how I was going to get through this part of it.

Of course not everyone will agree & would prefer to toss it all on a CC right away. I am sure there are other ways I have not thought of. In the long haul of things this has worked out better for me than trying to juggle cash advances and huge credit card debt all at once with no credit left to get back to my main doctor with possible future complications.