Plaintiffs Accuse Hospital of Trying to Collect Discharged Debts

A trio of former patients are accusing a South Carolina hospital of violating federal law by attempting to collect on debts after individuals have filed for bankruptcy protection.

The hospital was accused of using a state-run program that withholds tax refunds from individuals with unpaid debts to pay their medical bills. One of the plaintiffs owed as much as $90,000, according to a published report.

Lawyers representing the plaintiffs are seeking class-action status for the suit. A copy of the complaint in the case of Jones, Mayers, and Williams v. Lexington Health Services District can be accessed by clicking here.

In two of the cases, the bankruptcy had been discharged and the plaintiffs had been cleared from owing the hospital any debt.

The plaintiffs are accusing Lexington Medical Center of continuing to try and collect on debts after they filed for bankruptcy protection. The hospital is accused of “systematically” ignoring bankruptcy filings of individuals who owe the facility money.

The hospital used the state’s Setoff Debt program to collect $19.2 million in unpaid bills in 2017, which was up from $15.6 million on 2015. Lexington Medical is the second-largest user of the state program, according to the report.

South Carolina is only one of two states that allow hospitals to seize the income tax refunds of individuals to collect on unpaid medical debts.

“It is very important that individuals who go through the bankruptcy process get the fresh start that they are entitled to,” said Joe Hashmall, an attorney with Berger Montague who is representing the plaintiffs. “These tax return seizes deprive people of this important opportunity.”

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