Following a year when a virus spread worldwide and hospitalized approximately 32 million, medical bills began to pile up for many people who have since recovered. Many had already lost their jobs, creating financial uncertainty.
Failing to pay medical bills can potentially impact credit scores.
What to know about your medical debts
A vast majority of health care providers do not report past-due accounts. Instead, they use collection agencies to secure the money they are owed, usually after 60 days or more of delinquencies. Because medical debts are not supposed to show up on a credit report until they are six months overdue, collectors will still continue collection efforts.
While little can be done about medical debts due to injury or illness, certain proactive steps can help minimize the impact of unexpected expenses.
- Do not take the total balance due as gospel. Errors are on the invoices are all too common. Ensure their accuracy by going through procedures and medications line by line. Not only should you save the bills, but you should also retain the statements.
- While recovering from an injury or illness comes first, tracking the day and time of tests and medications in real-time can provide additional evidence.
- Paying with a credit card is admittedly convenient, and it staves off collection efforts. A better option is to wait for your insurance agency to cover some of the expenses or try to negotiate a smaller amount. A paid bill gives you no room to negotiate. Should a credit card be the only option, use the one with the lowest interest rate.
- A personal loan is an option if you qualify. While interest is involved, the percentage would be less than a credit card. Also, providing yourself that financial “cushion” will have a minimal effect on your credit score.
If all else fails, bankruptcy is a valid choice as well. Medical debts can be discharged in bankruptcy court. Also, it can provide you peace of mind instead of dealing with collectors calling day and night. While damage is done to credit, part of the fresh start will see your scores increase.
The first step in filing for bankruptcy starts with a call to an attorney skilled and experienced in this complicated practice area.