How to Recover From Medical Debt
- 1). Make a list of all of your medical debts. List the debt starting with the smallest balance owed. Usually medical debts don't ask for a specific monthly payment. A medical debt will normally list the entire amount that is owed. Write down a monthly payment that you can afford to make on a regular basis next to each creditor. Resist the urge to write down a payment larger than what you can handle even if the medical debt has a large balance. As long as you are paying something on your medical debts on a regular basis, most creditors will work with you. Call each medical creditor and let them know what you can pay.
- 2). Review your income and other assets on a regular basis. If you lose your job or your income decreases considerably, you may not be able to pay your medical debt. When you find yourself in a bind, you may have to contact consumer credit counseling. This is a non-profit organization that helps people in financial distress. It helps you with budgeting, credit counseling, and it can even contact your creditors and get them to accept even a smaller payment. You do need a source of income to participate in this program.
- 3). Contact each medical creditor and try to work out a settlement. You may be able to pay less than what is owed to each creditor by settling the debt. A lot of creditors accept settlements in the area of 20 to 75 percent of the balance owed. A settlement can significantly reduce your debt load. Try to negotiate, as a part of the settlement agreement, with the creditor about leaving the information off your credit file. Some creditors will agree to this, and others will not.
- 4). Contact a bankruptcy lawyer. Depending on your situation, you may have to file a petition for bankruptcy. They will be able to evaluate your situation to see if bankruptcy is a viable option. When a bankruptcy petition is filed, this information remains on your credit file for approximately 10 years. This can damage your credit score significantly. Consumer credit counseling representatives may be able to make recommendations about bankruptcy as well.
- 5). Make a note about the Health Insurance Portability and Accountability Act, which was enacted on Aug. 21, 1996. The primary function of this law is to ensure medical practitioners and health providers keep your medical records private, safe and secure. This will not stop them from forwarding your past due debt to a collection agency for further collection activity.
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