Medical Debt Options Including Credit Counseling
Credit counseling is one way to help reduce your medical debt or credit card debt but it is not always guaranteed that a company or organization can help settle or negotiate down your debt with creditors in regards to medical, credit card, and other unsecured debt.
When faced with climbing medical bills & credit cards, it is important to understand that you have three viable options and 1 worst case scenario option:
1) Negotiate directly with your creditors (hospital, doctor’s offices, credit card company)
2) Refinance your home to pay debt (value of house must be greater than current loan)
3) Work with unsecured debt specialists (credit counseling companies)
4) Declare Bankruptcy
When you negotiate with your creditors it is important to do it as soon as you feel you can’t make payments. Negotiating with a collection agency is very difficult as compared to working with a hospital, doctor’s office, or credit card company.
Refinancing your home is a last resort. With downward housing prices you do not want to be taking the remaining equity or cushion you have in a piece of property. Refinancing can be beneficial to pay off medical debt and credit cards if the interest rate on a mortgage is less than that on your current loans. However, this should be a last resort for you as refinancing ends up costing you more money in the long run because you are usually paying back a loan over 15 or 30 years. You should pursue option 1 and 3 before looking to refinance (if you can refinance).
Your third option is to work with unsecured debt specialists that focus on medical debt and credit card debt. Many companies usually can reduce your debt or reduce the amount you owe creditors for a small fee because they are experts in debt negotiation. It is important to make sure that a company or organization you intend to work with is on your state’s approved credit counseling list or the US Department of Justice’s. Use our links below to look up a Federal approved credit counseling agencies by state. Furthermore, many local agencies, universities, local governments, credit unions, and even your company may offer assistance with debt counseling.
Your last option is to declare bankruptcy. Bankruptcy can be vicious and leave you with nothing left to your name and in other cases it can be reasonable. However, for usually a period of 10 years your credit report will be tarnished making you ineligible for car loans, a mortgage and even credit cards. Moreover, some things you cannot avoid with bankruptcy are: student loans, child support, alimony and back taxes. Moreover, the information on your bankruptcy will be publicly made available by Federal, State, and/or local authorizes. In summary, it is not a good option.
Credit counseling is a viable option if you don’t have the time to negotiate with your creditors directly It is important to be proactive with your debt and utilize options 1 and 3 above before 2. If successful, you can be well on your way to settling your debt and making manageable payments if necessary each month. Becoming debt free is not going to be easy, but with the right advice & help it is surely possible.
For More Information On Medical Debt Relief Visit: Medical Debt
For more Debt Solution Articles visit: Medical Debt Relief
MedicalDebtHelp.com is an information portal for medical debt relief and other unsecured debt. We provide self-help medical debt advice as well as access to licensed health care debt experts.
Article Author :Charlie_Jones_Jr.
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