Nearly one-third of all consumers have at least one account in collections on their credit report, and over 20% of these are due to medical bill debt. Many people aren't even aware that their unpaid medical bill has been reported to the credit bureaus until after they check their credit report. A lot of medical providers don't bother to make much direct collection efforts before shipping them off to a third party debt collector. Managing medical debt can be a hassle, but worth the effort. Luckily, there are ways to ensure your unpaid medical bills don't end up in collections, negatively impacting your credit score.
Managing Medical Debt
Unlike other debts such as credit cards and car loans, medical bills rarely come with interest fees. This means that you can drag out the payment of the balance without penalty, as long as you are making some payment. Further, most medical providers cannot legally send your account to collections if you are making timely, minimum payments. The key is securing the payment arrangement.
It is important to contact the medical provider's office as soon as you receive the first bill to set up a payment arrangement. Often, they will tell you that you must repay the balance in full in three to six months. The truth is that there is no legal ground for this timeframe, rather, that is their preferred policy. What you should do is tell them what you can afford to pay each month and offer to set up an automatic draft of that payment from your bank. By offering to set up automatic withdrawal you are demonstrating good faith efforts in keeping your payment arrangement in good standing.
The unique thing about medical debt is that it is not considered a priority debt. This means that, in a bankruptcy filing should you need to, this debt is usually at the bottom of the list for repayment; often resulting in a write-off entirely. If you are having trouble negotiating your medical debts, contact bankruptcy lawyers in Elk Grove for more information about how to eliminate your medical bills in bankruptcy.