5 Ways to Get Out of Medical Debt
If you have incurred medical debt and you are having trouble paying or you cannot pay your debts, you have several options. A person not paying their medical debts is a common everyday occurrence and you can be assured that there are many options. Knowing your options can prevent you from becoming one of many people who fall victims of pushy debt collectors can easily pressure people into making payments that they cannot afford. Below are 5 common methods for settling medical debt. Your unique situation will determine which method or combination of methods you should use.
Medical Debt Consolidation using the equity of your home
If you have own a home and have owned it for several years, it is likely that you have built up some home equity. Equity is the market value of the home, less the unpaid principal owed on the mortgage. This difference can be used to borrow money. The great thing about using home equity is that the rate that you can borrow money is typically far less than you can borrow anywhere else. The only problem with this is that it does increase your monthly mortgage payments (unless you refinance to a lower interest rate that offsets the increase in principal) and if you default on your payments, you can lose your home as a result.
Medical Debt Negotiation
If you are underinsured and you can’t pay the care you need or needed, the best place to start is by simply asking the doctor for a reduced price. It is a fact that doctors charge insurance companies substantially less than they charge uninsured patients. This is because the insurance companies will negotiate a lower rate and this also proves that the doctors will work for less if they are asked or properly negotiated with. More and more people are beginning to ask for lower prices and out of those people who did try to negotiate, 50% of them did receive a lower price. It is important to speak with the right person and to be polite but persistent. Sometimes if you ask one person, they may brush it off by saying now they can’t do that, but they just aren’t aware that it is in their policy to actually accept lower payment. If you think about it, they would much rather have you pay less than not pay at all. Be persistent and speak with the right people and it will be very likely you can get a reduced rate.
Transfer to Credit Cards
Transferring medical debt to credit cards is a very convenient option to just about everyone in medical debt. It may seem like a good idea because it will allow you to pay off the debt over time in monthly payments. This can be a good option if pay it off as soon as you can and you do not let the interest add up. Interest payments can easily add up to be a large portion of the total payments made. Also, if you plan on applying for Medicaid, transferring medical debt to a credit card will reduce your chances of receiving Medicaid because once the balance is transferred, it is not longer considered medical debt.
Credit Counseling
Credit counseling companies can be a great choice if you are having trouble managing your finances. Most of these companies are non-profit companies and are great at advising you on your money and debts, helping you develop a budget, and will likely offer you free education materials. If you contact one of these companies you can expect their counselors to be certified and trained in consumer credit, debt management and budgeting.
Bankruptcy
Nearly 50% of personal bankruptcies are a cause of medical debts. Many people see this to be the easiest way out from medical debts. Bankruptcy can stop collections calls and give you somewhat of a fresh start. If you have been having trouble with finances before the medical bills arose or you see will have continued medical treatments, bankruptcy may only be a temporary fix and you can be back at the same place you were before. If this seems like your case, it is much better to go after the root of the problem instead of bankruptcy. Before considering bankruptcy, it is HIGHLY suggested that you exhaust the previous four options given in this article.
These previous 5 methods can be used to settle just about any medical debts. Understand your unique financial situation to figure out which method is best. Combining different methods can be extremely useful as well. If you are not comfortable handling these problems on your own, there are many professionals out there that are willing to help.
If you need help with your Medical Debt we can help by giving you a free, no obligation consultation to give you your best options in settling your medical debt based on your unique financial situation.
Article Author :Charlie_Jones_Jr.
Last 5 posts in Debt Relief
- Best Debt Consolidation Loans - Where to Find a Reputable Company - March 19th, 2009
- Is Debt Consolidation a Good Source For Debt Relief? - March 18th, 2009
- Debt Consolidation - Bankruptcy - Is it an Option? - March 17th, 2009
- Debt Consolidation is For Debt Relief - March 17th, 2009
- Debt Help - How You Got Into This Debt Mess and How You Can Get Out of It - January 21st, 2009
Debt consolidation companies provide a valuable service for people have accumulated more debt than they can feasibly manage on their own. With the current economic crisis, some folks who were able to make at least minimum payments on credit cards and keep up with mortgages are now finding if more difficult than ever to stay on top of their finances and manage debt repayment.
Unfortunately, as with any type of business, there are some debt consolidation companies that do not have the best interest of the borrower in mind, or are outright scams. Many of these ill-reputed companies have a strong… Continue reading
With the economy the way that it is today, many people are finding themselves in a credit situation. Sometimes these “credit situations” can get a little out of control and when this happens there are some choices that have to be made. Most of the time, by this point, the situation is beyond just a plan of better budgeting.
Some people will choose to seek the help of a credit counselor while others will examine the thoughts of debt consolidation versus debt settlement and even others will go on to face bankruptcy, which should always be the absolute last resort.
It is… Continue reading
Now-a-days, when financial crisis is looming everywhere, people are trying hard to overcome their bad debt management habits. If you too are finding it difficult to manage your debts, you can consider Debt Mortgage Consolidation loans. However, these loans are of several types and it is very essential to find out the type of loan that best fits in your interests before taking a final decision. But, bear in mind that your home is required as a collateral security for acquiring any of these loans. So, it is in your own favor to remain cautious for if you over extend… Continue reading