What Are Your Options For Paying Off Medical Bills?
If you feel like your medical bills have spiraled out of control, the good news is you have a range of options to alleviate your financial stress. Whether your medical debt is owed to a hospital, medical care specialist, or medical collection agency, there are ways to get help and become medical debt-free.
Let’s cover the various types of medical debt, how you might be able to reduce your balances substantially, and what the credit implications are for each medical debt relief method.
Hospital And Medical Specialist Bills Beyond Your Means
Perhaps you received a very large bill from a hospital or medical specialist, and you simply don’t have the money to pay it. In these situations, sometimes the care provider will work out a payment plan for you, but not always.
If you have no way to come up with the funds, these bills may be sold to a medical debt collection agency, potentially harming your credit and adding fees and interest to the original bill.
Hospital Bill Debt Collection Agency
When your hospital bill goes unpaid for too long, eventually, the hospital will sell the debt off to a medical collection agency for a fraction of the balance owed. These medical collection agencies then work to collect the maximum legal amount for the most profit. This is important to understand because it means you have room to negotiate for a payoff that’s easier for you to pay.
But before you start to negotiate with the medical collection agency, it’s best to first try to work something out with the original medical provider. If you can pay the debt off with them still, doing so will enable you to get the medical collection deleted from your credit report entirely.
How Can You Get Medical Debt Relief?
The main ways you can get financial relief from your medical debt include:
- Medical debt consolidation loans
- Hospital bill loans
- Medical debt collection settlements
Are You Considering Filing Bankruptcy For Medical Debts?
When you’re already struggling financially, having medical bills arrive in the mail for thousands of dollars can feel like there’s no way to improve your circumstances. In these moments, it can be tempting to turn to bankruptcy to wipe the slate clean and start fresh.
While this may be an option for some folks, it isn’t for everyone. There are significant downsides to filing for bankruptcy, so the decision should never be taken lightly. Let’s examine the two most common forms of bankruptcy—Chapter 7 and Chapter 13—along with the risks associated with both.
Chapter 7 Bankruptcy For Medical Bills
Chapter 7 is the most aggressive form of bankruptcy, which wipes all of your medical debt clean along with other qualifying types of debt like credit cards and collections accounts. Income qualification is required, so you may not be eligible for Chapter 7 bankruptcy.
The downsides are pretty severe with Chapter 7 bankruptcy. You may have to sell some of your assets like cars, boats, or electronics to repay your creditors, and Chapter 7 Bankruptcy can stay on your credit for at least ten years, dragging your entire financial life down.
Chapter 13 Bankruptcy For Medical Debts
If you don’t meet the income guidelines for Chapter 7 Bankruptcy, you may still qualify for Chapter 13 bankruptcy, which allows you to slowly pay back your creditors with a single payment over the course of five years. In Chapter 13, the court calculates your debt obligations, income, and assets to determine the payment amount, limited to 15% of your disposable income.
Chapter 13 bankruptcy only stays on your credit reports for five years, making it far less financially harmful than Chapter 7, but still is a considerable amount of time. So what are some alternatives for getting medical debt relief that won’t have such long-lasting and severe effects on your credit?
Alternatives to Bankruptcy for Medical Debt Freedom
Thankfully, there are numerous alternatives to bankruptcy if you’re burdened by medical debts. Depending on your financial circumstances, you may be able to significantly reduce the balances on medical bill debt collection accounts. There’s also the possibility you can drastically cut your medical debt monthly payments if you’re on a payment plan with a hospital or other healthcare provider. Let’s cover the alternatives to bankruptcy for medical debt.
Medical Debt Consolidation Loans
Do you have multiple medical debts that you’re paying every month? If so, you may qualify for a medical debt consolidation loan that can combine all of them into one manageable payment that significantly reduces your financial stress.
One of the key benefits of medical debt consolidation is how interest is charged. With a medical debt consolidation loan, you’ll only be charged one simple interest rate, and you’ll only have a single monthly payment instead of numerous bills to keep track of. Medical debt consolidation is just one of the options Alleviate Financial can help you with so you can become medical debt-free.
Hospital Bill Debt Settlements
Debt settlement involves negotiating with medical debt collection agencies or healthcare providers to significantly reduce your medical bill balances. Beyond possibly saving thousands of dollars, another benefit of hospital bill debt settlements is they won’t drag your credit score down as severely as bankruptcy and may have little to no effect on your credit. Much of this will depend on your current credit situation and whether the medical debt is being reported to credit agencies or not.
Get Expert Medical Debt Relief Help
Alleviate Financial has a team of medical debt relief specialists who will carefully listen to your financial situation. Once we fully understand the circumstances, we will create a strategy to help you become medical debt-free as quickly as possible with the least impact on your credit rating.
Our expert negotiators work hard every day to put a stop to medical debt harassment for our clients. If you’re ready to get started on achieving the best possible medical debt relief outcome, contact Alleviate Financial today!