Medical Debt: Part II

If you are faced with an excessive medical bill, know that there are many other people in similar situations and that there is a way out. The most important piece of advice also is the simplest: do not just ignore your bill.

If You Cannot Pay

If you are unable to pay the full amount, ask your medical provider for a payment plan. Under such a plan, you can make monthly payments on your debt to relieve yourself gradually of the liability. However, do not agree to payments that you realistically will not be able to pay.

Many medical providers will be understanding of your financial struggles, as long as you maintain communication and show a commitment to paying. To keep up a good relationship with your medical provider, pay at least a small amount of your debt each month.

If a payment plan cannot be agreed upon, you may want to consult a credit counselor, or a debt professional who will provide you with expert financial advice and may help to implement a new payment option. Counselors certified by the National Foundation for Credit Counselors are reputable sources to whom you can turn.

For financial assistance purposes, it is best that you keep your debt as “medical” debt. Do not transfer the balance of your debt to a credit card or cards, because by doing so you risk changing its medical status. You also may affect your eligibility for outside help. Furthermore, the interest accrued on your card(s) will be added to your balance.

Outside Help

There are many outside sources to which you may turn for help with your medical debt. Groups in your own community, such as charitable foundations, places of worship, or civic organizations, may be able to help you with your hardship. There also are programs for individuals who meet special eligibility requirements.

Low income families may be eligible for Medicaid, a useful assistance program that pays your medical providers directly. Such families also may be eligible for Children’s Health Insurance Programs, which often are connected to Medicaid.

If your need for medical care arose because of your employment, you may be eligible for workers’ compensation for your medical bills.

In addition, if your medical bill payments account for more than 7.5% of your adjusted gross income, you may write off the excess amount from your taxes.

Legal Options

If your attempts to work out a payment plan, to seek outside help, and to otherwise come to some sort of an agreement with your medical providers have been unsuccessful, your provider may sell your debt to a collections agency. Should this occur, you will be protected from harassment and from abuse of your personal information under the Federal Debt Collection Practices Act.

If you are sued for payment, ask the court to declare your income and property exempt from collections. It is up to you to ask for such consideration, and also to show why the exemption is necessary.

If your situation truly is dire and you have no way out, medical debt is dischargeable through Chapter 7 bankruptcy. In fact, over 50% of bankruptcies contain some type of medical debt.

A drastic decision that requires careful consideration and expert advice, filing bankruptcy may prevent your ability from filing in the future. If you have a serious on-going medical condition, consider how this could hinder your future finances and medical care.


Conclusion

No one wants to be in debt, but unfortunately many medical expenses are unavoidable. Securing health insurance, building up an emergency fund, and weighing your options ahead of time, however, can help to lessen the impact of medical bills.

Once payment is due for medical care, you have many viable options for repayment. Outside sources and legal means may be able to help you with your debt, but usually medical care providers will be willing to work with you to come up with solution, so long as you show your commitment to repayment.

Go to Part I of this article.