Your Guide to Medical Debt

An unexpected large medical debt has been the undoing of many family budgets. This is a particularly big problem in the United States because of our insurance based private healthcare system.

Under many circumstances a hospital is required by law to treat a patient whether they have the ability to pay or not. Oftentimes those patients end up saddled with huge debts after treatment. For many families and individuals this type of debt has been spiralling out of control. Even with our move toward socialized healthcare of late, led by the Obama administration, many patients are still dealing with very real debts and ongoing health problems.

How Medical Bills are Different from Other Debts

Medical bills differ in a number of important ways from other types of debt, like home mortgages or credit card bills.

• Medical bills are usually unexpected and not the result of deliberate borrowing.
• A large medical bill is often beyond your ability to pay.
• Illness or injury often also leads to a loss of income.

Because of these combined factors, medical bills are one of the leading forms of debt that cause people to declare bankruptcy. Our review of medical debt bankruptcy statistics will show you just how big a problem this is and how many people are caught up in the filings.

This kind of medical debt burden can devastate family finances and has caused much of the controversy over the American healthcare system—no other developed country expects its citizenry to finance their individual healthcare to such a degree through private insurance and healthcare service providers.

One of the big upsides for the individual with medical bills, if there can be one, is the fact that they are usually interest free. This is why it is typically a good idea to steer clear of consolidation loans when it comes to medical bills.

Some people, when faced with a large medical bill, and the medical debt collection that goes along with it, will attempt to consolidate this bill along with all their other debts into a single loan, typically using their home as collateral (a home equity loan). However, this is usually a bad idea. Even though it can bring your monthly payments down slightly, it can actually mean you end up paying more interest over time.

Despite these differences, a large medical bill can still have a negative effect on your credit score. They are recorded on your credit report, just like other consumer debt.

How Medical Debt Can Hurt You

One of the real negative effects of medical bills is that they can often cause people to avoid seeking further needed medical care in the future, in order to avoid accruing more debt. This is especially true among young, unemployed or low-income individuals.

Another common result of outstanding medical bills is bankruptcy. In fact, statistics indicate that bankruptcy is one of the worst possible outcomes of a debt problem, as it can seriously lower your credit score, have a detrimental effect on your ability to borrow money, and remains as a black mark on your credit report for up to 10 years.

Reducing Your Medical Bill

There are several angles from which you can seek financial help for medical bills. Among these are hospital debt relief programs, charity assistance, government grants and organizations such as Medicare and Medicaid. Of course, not everyone will qualify for one of these programs.

Being an empowered patient when you receive treatment will not only serve you well when you are in the hospital or under the care of a doctor but will put you in the best position when it comes time to pay too.

Our list of creative tips tell you how to get rid of medical debt and enjoy some level of financial freedom once you accomplish this goal.

Answers to Frequently Asked Medical Debt Questions

Can I settle medical debt on my own or do I need help?

Does bankruptcy clear medical debt from your books?

Who is responsible for medical debt after death?

More Medical Debt Tips and Information

You should seek out debt relief for your medical bills whenever not doing so would have a significant detrimental effect on your family finances.

In the event you are being sued for medical debt there are certain procedures to be followed. You need to know your right and options under the law.

Sometimes the only way to reduce a large outstanding medical bill balance is to get some top-notch medical debt consolidation help tips.

Another avenue to consider, if you truly cannot pay a medical bill, is a direct negotiation with the provider. It is best to do this type of intervention immediately, you don?t want the bill to go to collections before you try to get a reduction. This tactic can work.