My wife passed away leaving behind a lot of medical debt. Am I responsible?

Dear Quentin,

My wife died after a long hospital stay. She had absolutely no assets, but our house is in both names. Am I responsible for her medical debt? Can they take our house? (We don’t have health insurance.)

Left behind

Most Read on MarketWatch

Related: “I don’t want to be unfair”: My mother gave me $150,000 to buy a house. A brother wants a 15% property. what now

Darling Left Behind

I’m sorry you lost your wife after such a long hospital stay. Having this debt hanging over you only makes a traumatic situation worse. You and your wife are not alone in being uninsured; approximately 26 million Americans, or 7.7% of the population, do not have health insurance.

What happens to her medical debt will depend on your condition and, to a lesser extent, your negotiating skills. Medical bills are a special beast: Unpaid medical bills only affect your credit score if they exceed $500, and US states take different approaches to determining whether such bills are split between spouses.

“Most states (33) do not restrict hospitals, collection agencies or debt buyers from placing a lien or foreclosure on a patient’s home to recover unpaid medical bills,” according to the Commonwealth Fund, a private US foundation focused on the health system. .

Household exemption

Almost all states, however, have a homestead exemption, which protects some of the equity in a debtor’s home from being seized by creditors. “The amount of homestead relief available to borrowers varies from state to state, ranging from as little as $5,000 to the entire value of the home,” the Commonwealth Fund states.

“Seven states have unlimited homestead exemptions, allowing borrowers to completely protect their primary homes from creditors,” it said. “Additionally, Louisiana offers an unlimited household exemption for certain uninsured, low-income patients with at least $10,000 in medical bills.”

The story continues

It adds: “Eleven states prohibit or set limits on medical debt liens or foreclosures. For example, New York and Maryland completely prohibit both liens and medical debt foreclosures, while California and New Mexico prohibit them only for certain low-income populations.”

When a person dies, their medical debt is paid out of the estate, which can also come out of pocket. “Essentially, you may not have to pay your spouse’s medical bills directly, but you may still be affected by them,” says Artemis Family Law Group in Orlando, Florida.

“Many people are under the impression that they will not have to pay their spouse’s medical bills by simply refusing to sign any documents that would make them responsible for the medical bills,” it adds. “However, this is not a complete shield in all cases.”

What if the medical bill was paid using a common credit card? “The credit card company wouldn’t care that you didn’t name it as the responsible party. The credit card company will most likely hold you and the spouse paying the medical bills jointly and severally liable for the debt,” it adds.

To complicate matters: In community property states such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, assets and debts incurred during the marriage are generally considered marital property ( although laws vary) .

Case no. 1 of bankruptcy

Medical debt is cause no. 1 of U.S. bankruptcy, some studies put it at between 45% and 60% of all filings, despite the fact that nearly half of the U.S. population has employer-sponsored health insurance.

I point this out to shed some light on your wife’s situation. You may benefit from contacting the National Foundation for Credit Counseling, a nonprofit financial counseling organization.

Millions of Americans are either one paycheck away from losing their home or a medical crisis away from bankruptcy. More than 500,000 families go bankrupt each year for medical reasons, according to one estimate. It’s a big problem.

A study in the American Journal of Public Health concluded that bankruptcy is most common among middle-class Americans, who bear rising co-pays and deductibles despite the Obama-era Affordable Care Act.

Lower-income Americans “seek formal bankruptcy relief less frequently because they have few assets — such as a home — to protect and face particular difficulty getting the legal help they need to navigate formal bankruptcy proceedings,” the researchers found.

Negotiating a debt

When it comes to negotiating a debt, Equifax has some tips. “When dealing with a collection agency, start negotiations low. Start by offering cents for every dollar you owe, say about 20 to 25 cents, then 50 cents for every dollar, then 75 cents,” it says.

“Before fulfilling any payment agreement you negotiate with a debt collector, make sure you get the terms in writing,” the credit bureau adds. “Then, after your debt is paid, request written confirmation that you have paid your debt.”

Your question is short, but the answer is complicated. Depending on the size of the debt, it may be worth consulting an attorney to help you. Like I said, you can always negotiate. You may not be successful, but it’s definitely worth a try.

More columns from Quentin Fottrell:

“He never paid rent or utilities:” Do I have the legal and moral authority to charge my brother rent to live in our family home?

“I don’t want to be unfair”: My mother gave me $150,000 to buy a house. A brother wants a 15% property. what now

“I have no regrets”: I am 84 years old and estranged from my two adult sons. My wife of 48 years will receive my seven figure estate. Is he selfish?

Most Read on MarketWatch