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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Under California law and bankruptcy law. If a hospital bill

Customer Question

Under California law and bankruptcy law. If a hospital bill is discharged I the bankruptcy and the insurance company makes a payment to the insured after the discharge date, legally is the insured required to pay that money to the hospital? Can the hospital sue or open an adversary proceeding against the insured?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 4 years ago.

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Expert:  cfortunato replied 4 years ago.

Hi JACustomer,

The contract between you and your insurance company is between you and your insurance company, not between the insurance company and the hospital. Accordingly, the money the insurance company sends to you does not belong to the hospital.

However, the money you received may belong to the Bankruptcy estate.

 

I think this is what you wanted to know. If not, please let me know.
Thank you.

Customer: replied 4 years ago.
In what case would it belong to the bankruptcy estate? If the money was received after the discharge date and the discharge date was listed as the final date to object to t discharge of the debt then does the law protect the debtor?
Expert:  cfortunato replied 4 years ago.
The money would belong to the Bankruptcy estate if the hospital bill was incurred before the Bankruptcy was filed and if there is no available exemption to apply to the money.
Customer: replied 4 years ago.
So, if an insurance company sends a check payment made out to the insured debtor after the discharge date then the proceeds of the check would belong to the bankruptcy estate? How would that be applied to the bankruptcy estate after discharge is complete?
Expert:  cfortunato replied 4 years ago.
All claims the debtor has at the time of the Bankruptcy filing become part of the Bankrutpcy estate. Even though the debtor had not yet received the insurance check when the Bankrutpcy was filed, the debtor's claim (that the insurance check was based on) was in existence at the time of the Bankrutpcy filing.
This is so even if the discharge occurs before the check is received.
Customer: replied 4 years ago.
We were unaware of this check until it arrived so how do we proceed?
Expert:  cfortunato replied 4 years ago.
The correct thing to do is to notify the Bankruptcy trustee.
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
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