How to Deal With Medical Debt
According to the Federal Reserve, the credit score of two in five Americans is negatively impacted by medical bills. In fact, one in every six credit reports contains medical debt. Medical debt can quickly overwhelm you and cause a tremendous amount of stress and anxiety. So, what are some actionable steps you can take to help you settle this kind of debt? Today, we go over some ways to resolve medical debt.
Here are some ways to help you organize, settle, and resolve medical debt:
Check for medical billing mistakes
Before you even consider paying off your medical bills, ensure you were accurately charged. Medical care is expensive and billing errors are very common. You may have received a bill for medications you never took or an extra day in the hospital after you checked out.
Do not go into more debt by using credit cards to pay off medical bills
You might think paying off your medical bills outright with credit cards is a smart idea, but do not do this. Many credit cards charge a high-interest rate, which makes it even more difficult for you to get out of debt. This negatively impacts your credit score and can keep you in a never-ending cycle of debt payments.
You should see if you can negotiate medical bill payments, such as making smaller payments for a brief period. Most medical debt also comes with little or low-interest rates, which is not true for credit card debt.
Work out an interest-free payment plan
Call the hospital or doctor’s office you were treated at to see if they offer interest-free payment options. This is usually an option, but it is not advertised openly. You will not know if you can do this unless you ask.
Ask for a one-time discount
It is possible that a hospital or doctor’s office will give you a one-time discount for paying your bill in a lump sum.
Apply for financial assistance
Hospitals typically offer financial assistance. You will need to file paperwork and wait to hear if you are eligible for such assistance. A hospital will look at your application, tax returns, bank account information, paychecks, and other relevant financial information to determine how much of a discount they will allow.
Apply for Chapter 7 or Chapter 13 bankruptcy
There is no chapter of bankruptcy just for medical debt; however, medical debts can be eliminated when you file for Chapter 7 or Chapter 13 bankruptcy. It would be best to speak with an experienced lawyer who can guide you through this process to ensure your rights are protected.