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Medical debt can lead to a lien against your home without action

On Behalf of | Sep 28, 2020 | Bankruptcy

Most medical debt is unsecured debt. That means that you accrue a balance at the hospital without putting a deposit down or using any personal property as collateral against those debts. Some people might ignore initial collection efforts by hospitals because they assume that the hospital won’t want to sully its reputation by pursuing aggressive collection efforts.

Not only will hospitals across Oregon sell their debt to third-party collection agencies who could get very aggressive in their approach, but the medical providers themselves might also try to place a lien against your property because of your unpaid medical debts.

Once a hospital files a lien, you could lose out on home value

When a creditor takes a lien out against your property, they prevent you from selling or refinancing without paying them off first. You have to clear a lien in order to change title in almost all cases unless the new buyer agrees to assume the lien. Hospitals in Oregon have the statutory right to place a lien against your home for the debt you incur while receiving treatment.

If you have been unable to keep up with a repayment plan because of your medical condition or because of all the debts you incurred while you weren’t working, that lien could have drastic consequences.

If you do eventually sell your house, you can lose out on tens of thousands of dollars’ worth of accrued equity. The good news is that if you find yourself struggling with medical debt, you theoretically have the option of filing bankruptcy and discharging those debts before the hospital ever takes action to secure a lien against your home.


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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 22 years.