What You Need To Know! MEDICAL DEBT & "BUY NOW, PAY LATER" LOANS

All right, and so we are back with another episode with Chad Van Horn from Van Horn Law Group. Chad, you filed 170 Chapter 7 cases last month.

It was a busy, busy month. This is my favorite time of the week, by the way, talking to you, of course.

Oh gosh.

But bankruptcies are on the rise throughout our firm. We have a goal this month of hitting 200 bankruptcy filings, which would put us in the top 3 in the country. I just got back from Pittsburgh. The office there is rocking. Of course, the winos are already calling, and I met with one of them when I was up there. And we make sure we take care of every one of our winos.

I love it. So if they're in the Pennsylvania area, Florida area, or just, just want to call in and talk to someone about filing bankruptcy, you can help to guide them in the right direction as well too. So it doesn't matter where they are in the USA right now.

Correct. If you're, if you just want to talk and get general advice, I'm happy to do it. I've been responding to every single email that comes in. As you, as you remember, I gave my personal email Yeah, so, and I responded to every single one, and I think I'm keeping everybody pretty happy and making sure they have the information they need to become debt-free.

I love it. Um, speaking of, uh, debt, okay, a lot of changes going on right now. Two things I want to cover. First, I want to cover, uh, the medical, medical debt. Okay, so under the Biden administration, he had proposed that all medical debt would no longer go to credit reports. Federal judge in Texas just struck that down. What is going to happen? I mean, people are in serious medical debt. It's even more expensive than buying a house.

Yeah, I just met with somebody. They have over $100,000 worth of medical debt, and it's going to ruin their credit. So we're going to end up filing bankruptcy to get ahead of it. But, uh, I feel like every day there's a new ruling. Something was stricken, something changed. And this is going back to the old way where medical debt will be on your credit report. Uh, there's 3 bureaus, so it usually doesn't show up on all 3. It'll only show up on one depending what hospital or what provider. But the medical debt, which is billions of dollars worth of debt, is going to be back on credit reports soon. And this is likely going to go to the Supreme Court just like everything else has recently.

So let me ask you a question. So like If I were to file a Chapter 7, $100,000 in medical debt, I can get all of that wiped away?

All of it wiped away. And the good thing about medical debt as well, and, and some bankruptcy practitioners don't even know this, is you can be exempt from the means test, which, which forces some individuals that make a certain amount of income into Chapter 13 repayment, if your debt is non-consumer debt. And medical debt is considered non-consumer. So you can be exempt from the means test, file that Chapter 7, be debt-free in about 3 to 4 months.

Just like that.

Just like that.

What are hospitals saying about this? Like, I would be as a, as I don't know, as someone that owns a private practice and, you know, insurance companies. I mean, they are the, you know, listen, my opinion, not yours. One of the biggest scamming operations I've ever seen in my life. You know, I pay right now $1,500 a month. For 4 of us, 2 kids, husband, and, you know, myself. And we still have an astronomical copay. We also have bills. And I just let those bills— I'm gonna be honest with you, I'm the average American. I just, I'm like, listen, I've already paid y'all enough. I'm not paying no more. Send it to my credit report. I don't care.

It's one of the craziest systems. And I'm glad that the MDNows of the world are out here now where you go in and there's a menu of prices so that you know If I get this, it costs that. Um, when you go to the hospital, you have no idea what it could end up being, hundreds of thousands of dollars for a 2 or 3 day stay, because you don't necessarily know what they're doing, what tests are running. Um, you just need whatever help that you can get. So I think it's, you know, America is known for, for bankruptcy because of medical debt. I wish there was a better system. This is a system that we're stuck with. If you don't have that much medical debt, it's always worth reaching out to, to, uh, the hospital and negotiating with them because they will negotiate those bills down. It does seem like some of these numbers are just completely made up. Yeah, right. When you see, you know, charges for x-rays, MRIs, if you would do it somewhere else, it would be 1/10 of the cost. But because you had to do it at the hospital, you know, they, they, they get you.

You preaching right now, Chad, because I'm gonna be honest with you, like, I, I see a doctor out of New York, an endocrinologist, he's one of the top 5 in the world, okay, as far as like leading, you know, innovation AI practices on the thyroid and things like that. Chad, he gave me a panel to go do bloodwork. I went to a very, very well-known company around here to do bloodwork. They wanted $800. $800 for the bloodwork. I Google, I said, no, this is impossible. So I paid $800 the first time, right? Even though my insurance is going to cover some of it, but it's kind of like, one of those reimbursement options or whatever, because of all the tests that he wanted to run, they fell out of the scope of, you know, I guess immediate tests. And it was vitamins and minerals and things like that. So I ended up finding an offsite private lab, right? My test came back, all the tests all included, $120. $120.

Unbelievable. I'm hopeful that the future of medicine, these tests, we're going to get real pricing. Instead of these inflated numbers, because that's ridiculous. And it's important to know your blood test results, your minerals. You need to know all of that so you can take care of yourself moving forward. And unfortunately, a lot of people just would not take the test because they couldn't afford it, even though they needed it.

That's the basic test that you need. Am I vitamin sufficient or deficient? What are we doing? So mineral as well too. And so my thing is, like, As far as like, I guess, bankrupting the medical team, like, I don't know, it's kind of a win-win. Like, so they can go to the hospital for anything. It doesn't matter. Like, and the thing about it is, being that they don't have a price list, is it easier to challenge in a bankruptcy if they were to come back and say, well, they owe this, and it's like, well, where's the price? Did they sign off on this? Is it easier for you to challenge those?

If necessary. Usually medical bills and medical debt collectors are not the most aggressive, believe it or not. Uh, you may get phone calls, you may get letters, but I haven't seen many medical debts make it all the way to judgment garnishment. Um, usually it's resolved one way or the other before that, either through a settlement or through a bankruptcy. So, uh, the medical billers are, generally speaking, not showing up in a bankruptcy to contest a bankruptcy. Or try to get money out of the bankruptcy. Uh, there's much more aggressive creditors, the credit card agencies, um, the MCA merchant cash advance lenders. Those are the ones that are coming in and trying to get every penny they can out of the bankruptcy estate. It seems like the medical system just understands that there's a certain number that they're going to have to write off every year, and they build that into their billing systems and practices.

So they overinflate on purpose.

That's another way to put it.

Allegedly. Let's just say allegedly everybody's skimming off the top a little extra.

It is definitely built in. They, they have an increase built in to take care of all this for sure.

I'm just going to tell the viewers, if you're watching now, I think it's crazy that you would stress over medical debt or any type of debt, and especially when you're sick. You should be able to peacefully get better, but stress causes your body to not heal properly and could prolong your sickness or even could make it worse. Right. And so call Chad. Like, when I tell you it's stress-free, I don't worry about nothing. Chad has— I sleep well at night. Oh, my gosh. Thank you. Thank you for that, Chad.

And, you know, people really— and from watching this show, they they're getting procedures done that they may not be able to pay for, but they're necessary to save their life or enhance their life. And they're doing it knowing that they're not going to end up in jail if they have medical debt. Worst case scenario, they may have to file bankruptcy. Best case scenario, they may be able to work something out with the medical provider. But if you have medical issues, you got to get them fixed. They only get worse.

Do not put it off.

And unfortunately, the bankruptcy system is our medical safety net. In, in the United States. You know, other countries have different systems. This is our system. And if you need medical help, get it. We'll figure out how to deal with the debt later. Obviously, this is for like important, like life-saving or medical enhancements. Like, I don't want to see people coming in looking like Kylie Jenner or something and saying, I need to file bankruptcy to get rid of something.

I just got my lips done, my toes, my ass, like all of that, and I'm trying to bankrupt it. But there's a lot of girls out here on BBL What do you call it? Credit. And we're going to talk about those two, that the Care Credits and stuff. You get a lot of Care Credits involved in your bankruptcies a lot.

Yeah. Care Credit actually is one that'll come after. A lot of people get the dental procedures or whatnot on their Care Credit.

Yeah.

And then they, yeah, then they try to come to me right after because they might, they might have been thinking about bankruptcy already and they go to their dentist and they're like, hey, just get this Care Credit.

The last, the last set of Mohicans loan before I bankrupt.

Yeah, that doesn't always work out. So you can't knowing that you're going to file bankruptcy and then getting procedures done, you're probably going to end up getting an exception from discharge, meaning that that debt will survive the bankruptcy and you'll have to pay it back anyway. So you definitely don't want to get into fraud.

How long do you have to generally wait to include a debt? Maybe a year or two?

Yeah. So there's no hard and fast rule. There's a 90-day rule where if you incur the debt within 90 days, it's presumed that there might be bad faith there. Um, so, you know, unfortunately, some people that file bankruptcy, they have perfect credit, and then they get into an accident and have proper insurance, and then all of a sudden they have to file bankruptcy because they have six figures of debt. Um, in that scenario, obviously, um, you'd be able to bankrupt the debt. They really look at the intent. If somebody opens up a bunch of credit cards or starts using their credit cards for lavish purchases right before filing for bankruptcy, that's usually the indicator that, you know, we probably shouldn't file bankruptcy, especially that close. There's no exact number. It really is— it really comes down to the situation.

I know a lot of foreigners that do that. They come over here, they live for about 20, 30 years in the US, and they have excellent credit. And before they get ready to move back to their country, they buy a bunch of shit, even Cash App advance, and, you know, buy houses and build houses, and boom, leave to the dead in the US.

Wow, I haven't heard of that one, but I guess those people wouldn't reach out to me.

Some of the stories that I hear, I just be like, oh my God, like, I do not want to be involved in this. Why'd you tell me this? But it's actually a great idea, but no, I'm good, I'm good.

Yeah, if you're not planning on coming back, I, I guess there's really—

they're not going to chase you to whatever country it is, but, uh, Yeah, we just had a celebrity, uh, friend of ours of the show, uh, Simon Guobadia, who's not going to— like, he was just deported. His wife was awarded, uh, $40,000 a month in spousal support. He's like, how are they going to deport me and then order me to pay $40,000 a month in spousal support? Tell her to sell the house and get it.

Yeah, because it all comes down to enforcement, right? And yeah, how do you enforce it?

And she has to enforce it.

Yeah, you can order it.

She ain't got the money to do it. It's just funny. It's just funny. Let's move on to the CareCredits, the, uh, Klarna, the Afterpays. Um, we just got word that they are now gonna start reporting to the credit bureau. Now, first question, I don't know if you know this off the top of your head. Um, I know I am upset about this because, you know, I've used Klarna and Afterpay in the past to pay for something I don't necessarily want my husband to know about. You know, maybe some clothes or, or something, right? And it doesn't report anywhere. I gotta put it on and I could just pay it off little by little over time, especially if it's something that I know he'll say no to. I'm one of those wives, right? Just, I'm just gonna put it out there. Every wife can act like they don't do that, whatever. I do it. Who cares? Like, but you know, catch me if you can. Too late. So I've used Klarna, Afterpay, all types of buy, buy now pay later services. They don't report to the credit bureau. They don't necessarily look at your credit. But now that is changing because of the amount of debt that people are not paying, like they're not paying back their loans. So could they, even though let's just say I got a Klarna, you know, loan last year, I haven't paid on it, are they allowed to legally throw it on my credit report now, even though they said they weren't going to do it in the past when I got it? Is that, is that what's happening?

Yeah, the terms of service can change with, with all these loans. So these buy now pay later loans, they make things really easy. And, and at first I don't think they were an issue, but what's happening now, people are stacking them, right? So when you have, when you're putting your budget together, they say, oh, I could do this buy now pay later, I could afford this amount, but then they keep stacking them and then that $30, $50, $90 a month starts becoming a car payment. $300, $400, $500 per month when you look at all of these. So the, the banks got together and they said, well, if we're issuing credit to people, we want to know the full picture. We want to know everything that they owe. So we want these buy now pay laters to report to the credit bureaus, which, which will allow them to see how much debt you have. And a big indicator of your credit score is going to be that debt-to-income ratio. So if you have $500— I saw, I had a client that had had $1,000 a month going to buy now pay later. I can't wait to see what the actual figure is because once they report, we'll know how many billions of dollars worth of buy now pay later debt is truly out there.

I mean, people were buying like Gucci bags, Louis— I mean, shit that they just normally would not buy because you don't have that kind of money and credit cards won't give you that limit, especially if you're But for my daughter to be out there right now with no credit, right? She's 18 and they buy now pay later says, okay, we're going to give you a Louis Vuitton purse or, you know, Rolex watch or anything and just pay us later without even verifying that. That is a setup. That's a setup. That's worse than student loans for sure.

And you know where it's coming from. The retail industry loves it, right? Because it's opening them up to a whole different audience that would never be able to afford these products. And they make it so easy and it looks like it's free. You're like, buy now, pay later. Sure, I'd rather just pay later. But unfortunately, when you don't pay later, you get hit with so many charges and interest and fees on top of it that you'll end up paying double or maybe triple for that purchase.

How has Rent-A-Center not been able to, like, you know, all those like furniture places and stuff, how have they not been able to report to the credit bureau?

You know, that's, that's a great question. And Rent-A-Center has their own little, uh, racket going, if you will. Um, I've included some of Rent-A-Center in bankruptcy, and they don't even pick up the furniture if you include them in the bankruptcy. We, we offer it to them because obviously it's rented, and they don't even take it back. So, uh, I've never seen them take it back in a bankruptcy, believe it or not.

I was gonna say, like, why would they even want to repo that? That is crazy. But that's been their model. So do a lot of these retail companies, like, they get these companies to have subcontracts with the bank. So basically, they're getting their money. That's between you and the bank once they get their money.

For sure, for sure.

They overinflate so that everybody makes their money back. So any interest collected, that's kind of extra on top. So everybody makes money off of the purchase.

That, that's exactly right. So, so if you're, if you're the re— if you're the retailer, you're getting paid up front, you're happy. I would imagine that these buy now pay laters are somehow getting a portion, uh, of that, of that, um, retail purchase, if you will, just because it would, it would, wouldn't make sense for them to get paid back zero if it's truly paid back. And the retailer is— makes out and doesn't have any risk because Now the risk all falls on the lender.

But luckily for you, Chapter 7, Chapter 13, Chapter 11, you can bankrupt all of that.

All of that can be bankrupt. But if you did buy that Gucci or Louis Vuitton purse, they may take that Louis Vuitton or Gucci purse. So make sure if you're buying these things with buy now, pay later, that you're listing them on your schedules because they will have that list. Oh, wait a second, I see that, uh, There's a $2,500 purchase of a purse here, but you don't list you have any purses. So be careful with that.

I was asked to on my schedules to list my name brand. I only had like 2 Louis Vuitton bags. I was like, yeah, you can take them. They said no.

I actually had a client once who, uh, he was a celebrity client, had a bunch of jewelry, and the, the, uh, trustee was so excited because they got to take the jewelry and sell it. It was all fake. All of it was fake, and they gave it back. He was being ripped off by his jeweler. He found out.

How did y'all reverse that?

Well, the— at that point, it didn't matter because the trustee was going to take it, take it and sell it, and they took it to, uh, get appraised, and it was all fake. And then, uh, he just found out that his jeweler was taking, taking advantage of him for at least a decade.

That's crazy. That's crazy. Listen, Chad, um, They need to call you. I mean, things are getting real out here. I just heard the dollar is about to collapse big time. I don't know how real that is, but Bank of America put out a report there. Are you on standby ready to take calls?

You, you know it. I'm here 6 days a week. We're working earlier, we're working later. We've expanded our workforce. We are here for you. We're gonna— we're open up in another new state coming up in a few months. I'm just finalizing some things with that, so We are going nationwide to be able to take care of the winos. Give me a call now. I know a lot of you are dealing with debt because we all are. We can definitely take care of you.

Okay. If you were to file bankruptcy, could you do it yourself or you could have somebody represent you?

I mean, you would have to have somebody represent.

Okay. I was going to say, I didn't know if you could save money there. You know what I'm saying?

It wouldn't be worth it, especially because, you know, your lawyer represents you so they could go up there and they could argue. But if you're up there arguing, you, you could perjure yourself by accident because you're not only arguing, you're testifying at the same time. So it's a dangerous world to be in.

Oh, oh, oh, that's good to know. That's good to know. Well, listen, Chad, listen, I can't wait to see what we, uh, I can't wait to have you back next week to discuss, um, some other things that's going on in the economy right now and how it's, it's affecting everybody's finances, um, including our, you know, our own and our own businesses and things like that. And so we're always happy to have you here just to kind of educate and provide that peace. Okay, so that people can restart and get clarity and, you know, ask questions and, and make ultimately the great decision to just let somebody else deal with that shit. Let the federal government figure that out, you know, by filing bankruptcy and, and take advantage of it. It is not a bad thing. It is not embarrassing to do.

Yeah, I'm blessed every day I get to come in and give people hope of a brighter future. And that's certainly what your show is doing on top of entertaining and everything else that you do is incredible. So just thank you for this opportunity to talk to your, your audience and help the winos.

Anytime, anytime. Vanhornlawgroup.com. Follow him everywhere. Facebook, Instagram, YouTube. Okay, chat, what's your email real quick? You want to give it out so they can personally email you?

Let's do it again. Absolutely. Chad@cvhlawgroup.com comes directly to me. You will get a response within 24 hours.

All right, he's, he's on standby and he's personally going to answer your emails. Thank you, Chad, and we'll see you next week.

Okay, thank you, Tasha.

All right, we gotta go. Bye.