Added Dr as a creditor

[skyoumans]

My daughter tore her ACL in January and we used our flexible spending account to pay for the surgery. I added it late to the chapter 13 because I did not really consider it a bill since I paid for it with flexible spending. He wanted to know all the medical bills I paid more than $600 in the last 90 days. Will the trustee go after money that I paid with flexible spending and my daughter still has follow ups with the orthopedist. Will they still see her if they are now listed as bankruptcy?

[justbroke]

It depends but Chapter 13 Trustees "usually" don't like to get into litigation and chase money. You can get mixed results when including a doctor in your bankruptcy filing. If you haven't paid them yet, then the doctor would be included in the bankruptcy and the debt dismissed. In the case of a Chapter 13, if the doctor filed a claim then they "may" get all or a portion of that money back depending on how much you're paying back.

If you want to keep the same relationship with the doctor, it's usually best not to cause them a financial loss. This is why some Chapter 7 debtors pay back their doctors after discharge despite the debt being discharged.

[Carmella]

Did you ask your attorney about it? Since it's a flexible spending plan that money is taken out pre tax to be used for certain medical expenses. I wonder how that plays into it vs you just paying that doctor out of your pocket and not paying other people you owe. If you do not use that money to pay expenses I believe you lose that money.

[sophieanne]

Carmella, skyoumans - that's a good question..I was thinking along the same lines as Carmella, The money in a flexible spending account is there for medical expenses (which you could very well having during a 13)...I know we had money in an HSA when we filed and that was not looked at as money in the bank. Unless someone knows something different, I don't think that the fact you paid a medical bill from a flexible savings account is counted as a preferential payment. (Again may be a question for your attorney)

[justbroke]

As far as I know and understand, money in an HSA account are exempt. But money in a healthcare savings account (HSA) may not be protected. It may depend on which State in which the debtor lives. Florida, for example, has a specific exemption for HSA/MSAs. Now looking at whether or not a Chapter 13 trustee cares, that's the question. While a Chapter 7 Trustee may be able to go after "non-exempt" medical savings accounts (HSA, FSA, or MSA), I just don't see a Chapter 13 Trustee caring. But that's me.

Perhaps the attorney is trying to make sure that your Statement of Financial Affairs (SOFA) is clean and up to date. They will add the "creditor" to the SOFA and mark that it's "other" and Medical. I see no issue and I don't see that a Chapter 13 Trustee is going to try to claw money back from a doctor. If, however, it's a significant amount then this may affect your "best interest of creditor's" test which could mean that there's a minimum amount you have to pay back in your Chapter 13. I don't think it will unless it's truly significant ($$$$$$)

[skyoumans]

Thanks guys, I guess I will have to see how it plays out. I did let the paralegal know that it was FSA and they still wanted all of the information. I just hope that her orthopedist keeps seeing us until she is fully recovered. It was a significant amount of money with the orthopedist and surgical center being the ones I had to let them know about. When all is said and done with ER visit, Surgery and PT we will be at the max of $5000.

[Carmella]

I am sure they need all the information, but I don't think that necessarily means they won't let you pay him with it. I obviously don't know the answer since i am not an attorney and I hope it works in your favor.