The lasting impact of unpaid medical debt
You never know when a sudden injury can send you to the hospital. When an accident does happen many people do not have insurance. On the other hand even those who do plan with health insurance could be brought to a hospital out of their network. Either way medical bills will start flooding in for thousands, even hundreds of thousands of dollars.
It is no wonder that American has such a high amount of medical debt. Over half of uninsured Americans say that they struggle to pay their medical bills, while about 20 percent of insured people have a hard time paying theirs.
A medical bill sent to collections can haunt you
Those who cannot pay their medical bills they will see their credit score suffer. A medical bill will not show up on your report until it goes into collections. The result is a sudden harsh drop in your credit score. Unfortunately a bill that goes into collections can take up to seven years to come off your credit report. The good news is that you can lessen the impact over time.
Once you are able to pay the debt off your credit score will slowly raise over the years. For many Americans this is an impossible task. The outlook of paying off hundreds of thousands in hospital bills is unattainable for most people. For those who fear they cannot tackle the debt alone, consider the following steps.
Four steps if you cannot pay your medical bills
If you cannot pay your medical bills then you do have some options. Be proactive and try to do everything in your power to lessen the blow to your credit before it goes into collections. Take the following four steps:
1. Negotiate with the hospital: In many cases patients do not know that hospitals will negotiate their final payment. If you know that you will not be able to pay off your bills then contact your medical provider and let them know. They could negotiate a lower price with a payment plan. Make sure to get their final confirmation in writing.
2. Crowd fund your bills: The new trend in paying major bills is called crowd funding. Sign up on a website such as Go Fund Me. Publish your story on social media. Many times a few dollars here and there from friends and relatives will go a long way in paying your mounting bills.
3. Sign up for Medicaid: If you qualify then sign up for Medicaid. You might be able to qualify if you receive a certain amount of income or if you get Supplemental Security Income. If you sign up right away Medicaid can back pay your missed bills for up to three months prior to your applications.
4. Speak with a lawyer: If you find that your medical bills just keep piling up then you will want to speak with a lawyer about your options. You can consider either Chapter 7 or Chapter 13 bankruptcy. It might serve you much better to start fresh than to continuously damage your credit with unpaid bills.