Medical Guarantor

Thank you for your question about medical debt and a medical guarantor. Dealing with medical bills can be challenging, especially when it comes to understanding who's legally responsible for these debts.

There are two key issues spouses need to focus on when it comes to liability for medical debt. The first is a contractual issue — did the non-patient spouse sign a contract that includes guarantor language? The second issue is the state laws where the spouses reside.

What is a medical guarantor?

In many cases, the patient is the primary liable party for medical expenses. However, a medical guarantor is someone who agrees to take responsibility if the patient fails to pay these expenses.

This guarantor can be a relative, a spouse, or a close friend of the patient. The guarantor is responsible for the unpaid debt. Even if the patient is not married, a spouse may be held liable for medical bills. While the exact legal implications of spousal responsibility

Medical debt and contractual liability

A guarantor is a person who promises to pay the service provider if the patient cannot or will not. If the non-patient spouse signed a contract to be a guarantor, which is usually included in hospital admission forms, then that spouse promised to pay for the services. If the non-patient spouse never signed a guarantor contract, then he or she has no contractual obligation to pay the debt. However, the spouse may still be obligated to pay the debt, albeit under a different legal theory.

Medical guarantor: Liability under state law

The second key issue to focus on is the laws of the states where the spouses reside. Let us assume for the sake of argument that both spouses reside in the community property states. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin.

If the spouses live in a community property state or lived in one at the time the consumer debt occurred, the non-patient spouse may have incurred liability without signing any contract. The reasoning is that if a debt incurred during a marriage was used for the support of a spouse, liability may accrue to the non-signing spouse. Does this mean that the non-patient spouse has liability for the patient's debt in community property states? Maybe. Some creditors will not pursue legal action against the spouse because it is difficult to do so and are unwilling to expend the resources. Other creditors will take the time and expense. Each creditor has different policies, and therefore each case is different.

What about spousal liability in non-community property states? The rule in non-community property states is much simpler -- there is no liability for a spouse’s debts under state law. However, if the non-patient spouse signed a guarantor contract the contract trumps state law.

A tricky question is raised when one spouse resides in a community property state and the other resides in a non-community property state. Answering this question is very fact-dependent, and can only be answered on a case-by-case basis.

One additional thought: Creditor customer service representatives will try to convince a spouse that he or she has liability for a debt. Do not believe legal advice from anyone trying to collect money from you unless they are your attorney. Legal advice from collection agents is usually incomplete or wrong, and is always self-serving.

Judgment and liability: What happens to the medical guarantor

A judgment occurs after a civil trial has ruled in favor of one party. A court, following appropriate state laws, will grant a judgment that allows the victor to apply the remedies allowed by that state’s laws.

Here, it appears that a creditor sued you for breach of contract, won, and now has a judgment that allows it to use your state’s remedies to collect money. Depending on your state’s laws, these remedies may include wage garnishment, levy of your financial accounts, and placing a lien on your property.

It is unclear from your message if you alone where sued, if your spouse was sued alone, or if both of you were. As explained above, your spouse may or may not have liability for your debt. If your spouse does either contractually or under your state’s law, then your spouse is subject to the judgment.

Spousal Liability in Bankruptcy

In community property states, the marital community enjoys the protection of the filing spouse's bankruptcy discharge when a spouse files bankruptcy.

In non-community property states, a Chapter 7 or 13 filing may not have any effect, positive or negative, on the non-filing spouse. The filing of one spouse does not give the other spouse protection of the "automatic stay" (blocking creditors from collection) or the bankruptcy discharge. Similarly, one spouse filing bankruptcy will not have an effect on the other spouse’s credit report, if there are no joint debts. If there are joint debts, you can expect the bankruptcy to be noted in some way on the credit record of the non-filing spouse.

In non-community property states, if both spouses are jointly liable to a creditor, the bankruptcy of one does not relieve the other of paying the debt. Upon a bankruptcy, the creditor may look to the other spouse for payment, unless the bankruptcy case is under Chapter 13. If the debt is a consumer debt to be paid 100% through the Chapter 13 plan, the co-debtor is protected by the co-debtor stay.

Recommendation

Find an attorney in your state who has experience in bankruptcy. An attorney will be able to advise you of your rights and liabilities based on your state laws and the documents signed before and during the medical procedures. I realize my answer does not provide the information you seek, but it is impossible for me to even guess what the guarantor liabilities are here without knowing more information.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com