M32 How To Deal With Medical Debt When You Cant Pay Right Away

How To Deal With Medical Debt When You Can’t Pay Right Away

Spread the love

When you can’t bear the medical expenses, the worst thing you should do is ignore them. Most medical providers will be willing to strike a deal with you, so you have the power in your hands to negotiate the bill. Indeed, the doctor’s office will always be easier to discuss the issue with than a debt collection agency.

Whatever your course of action, it’s in your best interest to start resolving matters right away. If you need medical debt forgiveness or payment relief, try the suggestions below. Most steps will prove beneficial before bills hit collections. Keep reading and deal with medical debt once and for all.

How Medical Debt Affects Your Finances

To understand how does medical debt affect credit and finances overall, check your score more often. The law guarantees that everyone can get one free credit report a year from each credit bureau. However, consumers can check more often during the COVID pandemic.

Keep in mind that unsettled medical debt appears on your credit report after 180 days. Unlike other loans, credit reporting models don’t consider medical debt detrimental to your finances as other debt types.

Still, if you apply for a mortgage or car loan, you might face difficulties due to missed payments on medical bills. Conversely, if you make on-time payments on a medical bill, your credit could improve as a result. So, in case you’re getting behind with your payments, call your healthcare provider and arrange a new payment plan. Most creditors would agree upon smaller on-time contributions rather than nothing.

If your attempts are futile, it is worthwhile to consider bankruptcy. Many debtors refuse to pay huge debts if it is more cost-efficient to file for bankruptcy. Yet, this option carries certain risks and can affect your finances adversely in the long run.

Quick action is crucial to preventing a medical bill from damaging your credit history. Avoid negative consequences by taking care of medical debt right away. Contact a debt specialist or your service provider and resolve the matter as quickly as possible.

If you don’t take action to get out of debt, the bill will go into collections, which is the worst path to take. Even worse, your wages might get garnished or your assets seized. In this case, you risk your finances vanishing into thin air.

Will Medical Debt Impact My Credit Score?

Unlike mortgage lenders, healthcare providers don’t report medical payments to the major credit bureaus regularly. So, consider this opportunity an advantage and work out a payment plan. In most cases, medical debt will not impact your credit score unless it becomes delinquent.

When unsettled, any medical bill will find its way to collections, like any other due bill. At this time, credit bureaus get notified. Yet, even in collections, medical debt gets treated under slightly altered conditions than the remaining debt types.

Overall, the law urges debt collectors to wait 180 days to report delinquent medical bills to the credit bureaus. As a result, you may have some time to strike a deal with your provider or insurer.

Once the bureaus get informed of your collections account, your credit score will plummet. The impact will depend on your financial situation, but good credit could face a drop between 50 and 100 points. Note that the impact will lessen over time.

Next, you might wonder how does medical debt affect credit scores in terms of time. Well, an unpaid medical bill can stay on your report for seven years. The credit bureaus will have to eliminate the debt from your report once your insurer settles the bill.

Finally, remember that each state has its statute of limitations for unsettled medical bills. Generally, expect to get from three to six years after the bill got registered as delinquent. If the period for the statute of limitations has passed, no creditor can sue you.

Who Can Help With My Medical Bills?

If you spare no effort to keep up with your hospital bills, you’re not alone in the fight. Several programs and platforms can help you overcome the situation faster. Below are the most popular and convenient ones.

Patient Assistance Programs And Grants

Financial assistance programs for medical debt may be available through the hospital. Inquire to see if there are any grants or medical relief funds for which you qualify.

Samaritan Health Services and HealthWell Foundation are some of the most accessible nonprofit organizations. These nonprofits offer financial help to individuals and families with medical expenses. Eligibility is often income-based, so you may need to submit financial information. Hence, include pay stubs or tax return information as part of your application process.

Charitable funds can lower and sometimes even cover a medical bill entirely. So, if you are struggling to pay for medical expenses, look for grants through local churches and national groups. A dedicated Samaritan fund may also be available at your healthcare center.


Any income-based hardship or financial assistance your provider offers will be far easier on your wallet than the payment plan you negotiate. Yet, the downside of these aid programs is that they usually target lower-income patients.

Plus, you may have to apply for Medicaid before your provider considers your request. Bear in mind that Medicaid income thresholds differ from state to state. Generally, the limit is close to the poverty line or $12,880 for individuals in 2021.

So, if you are a senior citizen in the low-income bracket or have medical expenses beyond your income, opt for Medicaid. This government-funded program can help you cover the medical treatments and prescriptions you need. When approved, you can receive back payment for procedures. In addition, many ensure coverage of future therapies and medications, thus reducing the overall medical costs.


Prescription medication often costs too much for the uninsured. According to CMS, prescription drug spending has been increasing by approximately 6.3% each year. One way to save on healthcare is through a savings service like SingleCare. SingleCare can save you up to 80% on pills and medication, and it’s completely free.

Other ways can also help you save money on medication. Healthcare providers tend to carry samples of prescription medications. Hence, don’t hesitate to ask your provider for a free sample and pocket the difference. Plus, you can always look for alternative or generic forms of your medicine. Your pharmacist or medical provider may help you find an affordable solution to expensive medication.

dealing with medical debt you cant pay
Photo by RODNAE Productions

Some organizations help Americans that can’t pay their medical debt. You shouldn’t think twice before asking for assistance as you are not alone!

Best Ways To Deal With Medical Debt

When hospital bills start to pile up, don’t panic. The critical step to take is to start working on paying off debt right away. To do so, check the strategies below that will assist you in overcoming any financial hardship on a short note.

Review Your Medical Bills For Errors

Most hospital bills contain errors, so scrutinize yours for mistakes immediately after you receive the invoice. Even better, ask for an itemized billing statement with all the charges for medications, tests, and procedures.

Those with health insurance should seek an explanation of benefits from their insurer. This way, they can better understand the billed services, the bills insurance covered, and any due amounts. Specific inaccuracies can be challenging to spot, but here are some frequent errors that any lay person can catch:

  • Double billing for the same service tends to be the most common billing error.
  • Expenses for tests or treatments that didn’t take place or got canceled.
  • Inaccurate medication quantities or medicines that never got administered.
  • ·Wrong patient information such as misspelled personal or insurance information or an incorrect Social Security number. As a result, your insurer might reject your claim.

If you don’t understand some of the fees, contact the hospital billing department and ask for clarification. Document every phone call or conversation if you believe your bill has incorrect information.

Check Your Insurance Policy

Consider all your deductibles, copays, and out-of-pocket maximums if you have health insurance. Then, check whether your provider is in-network or out-of-network. Ensure your bills and explanation of benefits correspond with what your policy includes.

If you think your health plan should have covered a specific service, get in touch with your insurance agent. Sometimes, claims get rejected due to trivial errors, such as procedures that your provider incorrectly coded. These mistakes can be easily corrected if you act on time.

Sometimes, claims get denied for more complex reasons. For instance, insurance companies may explain that your treatment was experimental or unessential. In this case, you are entitled to appeal the decision of your insurance company.

When appealing, you might demand an internal review conducted by your insurer. Besides, you have the right to seek an external review by an independent auditor under the Affordable Care Act. If you decide to appeal to your insurance company, inform your healthcare provider. This way, you might avoid having your bill transferred to collections.

Negotiate With The Hospital

If you can’t foot the bill in due time, there’s nothing to be ashamed of. Be honest with your hospital or doctor and share your financial issues with them. Make use of some supporting documentation to prove your situation.

Healthcare providers are aware that many patients can’t afford to pay for the rendered services. So, they may be willing to negotiate the bill hoping to get at least a portion of the initial cost. Remember that paying one part of the due amount in cash will put you in a better position to negotiate. For example, you can offer to cover about a third of the total price in cash.

Moreover, if you’re aware you won’t manage to pay after the treatment, ask for a prompt pay discount. You might land a discount with some providers when paying upfront.

Last, research what insurance companies would pay for the treatment you got even if you don’t have insurance. Then, be ready to pay the reduced price that insurers typically pay.

No matter your negotiation strategy, don’t expect to get a significant discount after a single visit. You will get rejected many times. Still, go a step further and explain your situation to the supervisor. If you manage to agree on a discounted amount, always get it in writing to prove your deal.

Look Into Financial Assistance Programs

Some healthcare providers allow patients to apply for charity care or in-house financial aid. In short, written financial assistance policies are often in place in both nonprofit and for-profit hospitals. To qualify, you should be on a low income or unemployed. Also, you should be uninsured or owe a significant amount beyond your insurance coverage.

The discounts you’ll get usually depend on income. For example, some nonprofit systems offer free, medically necessary care for uninsured patients only. Typically, eligible patients must have an income up to twice the federal poverty level. Uninsured patients who get paid two to four times the poverty level can get discounted treatment, too. Even if you don’t meet the specific income, you may qualify since hospitals determine who gets charity care based on various factors.

Another element to get your debt reduced is to demonstrate financial hardship. Besides, you are eligible to apply for financial aid long after billing. The federal rules oblige nonprofit hospitals to give patients up to eight months to seek help. Meaning, you can apply for charity care after the bill has gone to collections.

Setup A Payment Plan

The good news is that most medical providers will agree to a payment plan for your bills. Indeed, a well-termed payment plan is one of the most common ways to settle a high bill. Many physicians and hospitals will allow such a settlement if you can’t pay in one lump sum. The same goes for dental financing.

The minimum amount you’ll pay at first will depend on the total cost and the negotiated terms. Expect to break the bill into several equal payments over a few months until you pay off your debt.

Remember to ask if there are billing charges associated with the payment plan. This way, you can decide if your payment plan is affordable or you’re only prolonging your financial crisis.

Consult With A Medical Bill Advocate

In some cases, patients can face an incredibly high or complicated bill. So, why don’t you try to discuss your issue with a medical bill advocate? Such an expert can negotiate on your behalf and find ways you can’t think of to reduce your bill.

However, these professionals don’t work for free. They either charge by the hour (about $100) or a portion of the amount reduced from the bill (around 30%). Of course, since you’re experiencing hardship, consider getting free or low-cost services from a nonprofit advocacy organization. To this end, check Medical Billing Advocates of America and the Alliance of Claims Assistance Professionals.

Medical Bill Forgiveness

Medical debt forgiveness is the ultimate strategy for nonpayment you should try. Yet, don’t get into the trap unless you have a verifiable hardship. Eligible applicants should have a disability that prevents them from working. By applying for medical bill forgiveness, you ask the provider to waive your debt entirely.

Note that providers will need proof, such as tax returns and written documentation, that you cannot pay your medical bills. If the hospital denies your request, turn to nonprofit organizations like the PAN Foundation for help with your medical bills.

Settling Your Medical Debt

Settling medical debts for less than billed is another food for thought. It can prove challenging, but a credit counselor or an experienced debt specialist can help you out.

When you settle medical debt, you do it the same way as with any other obligation. You or your representative must contact the hospital or the collection agency to negotiate an agreed-on amount. Once you define the settlement process the way that suits you, you can start repaying.

Initiating the settlement process as soon as possible is the best approach. Do so before the debt goes to collections, which may not be willing to cooperate. Anyways, even if you have to deal with collection agencies, don’t back off. A confident and open approach can strike a negotiated agreement that works for everyone.

photo 2021 08 19 15 09 51
Photo by Tara Winstead

Sometimes, your finances will need medical care after a hefty hospital bill. Yet, there are ways to deal with healthcare costs and survive the challenging times.

Last Resort For Medical Debt Relief

When negotiation attempts and assistance programs fail you, there are still practical steps you can take. These approaches may cost you, but at least you’ll leave the medical bill burden behind you. Check the suggestions below.

Unsecured Credit Loans

One can always apply for an unsecured personal loan to cover medical expenses. Your lender will define a repayment plan for you and release you from the pressure to pay in one lump sum. Yet, this option carries many risks, so think twice before you apply. Though you will foot the bill right away, your financial tirade won’t stop there.

The personal loan will forestall imminent default, but you don’t resolve the issue in the long run. Be particularly wary with unsecured loans if you are temporarily or permanently unable to work or replace your current income.

In addition, any loan application could hurt your creditworthiness. The ultimate threat to your credit score is the risk of missing payments. When you default on a loan, your account can go to collections and remain on your credit history for many years.

Getting A Medical Credit Card

Medical credit cards aim to help troubled patients pay for qualifying health care expenses. You can get them in hospitals as a way of breaking down bills into monthly payments. The upside of this repayment strategy is the zero percent interest if you pay the total amount for up to two years.

A medical credit card can be worthwhile for patients that undergo elective surgeries to cover them under alleviated terms. So, instead of tapping into your savings or investment account, you have the chance to pay over time interest-free. Still, some reasons to be wary include ensuring you can pay off the balance during the prescribed no-interest period.

If you don’t repay the original balance in time, you will get charged retroactive, higher interest on the total amount. Also, late fees are stiff, and you might lose the zero percent interest rate. Plus, if you put your bill on a medical credit card, you won’t qualify for medical debt tools, like hospital financial assistance.

Paying Your Medical Bill With A Credit Card

Consider a credit card for medical debt as the last resort solution due to high interest rates. Unlike medical debts, which are usually interest-free, credit cards accrue interest. Also, once the debt gets transferred from medical to credit card, most protections for medical debts get waived. Creditors see medical debt transformed into a credit card like “regular” debt.

If you can’t pay the credit card bills promptly, first discuss the issue with the medical provider. An interest-free payment plan will be more manageable than credit card debt.

If you still decide to go with a regular credit card, carefully review the terms. Some providers may advertise a no-interest grace period for several months. Take this perk into account, but don’t forget that APRs after the grace period are relatively high.

Consider Bankruptcy

Medical bankruptcies don’t exist, but if you’re struggling with medical bills, filing bankruptcy might be your only option. Unlike tax debt, medical debt can get discharged in bankruptcy. Your first option is Chapter 7 bankruptcy, which is quicker, and many filers get to keep most of their property. Under Chapter 13 bankruptcy, you will continue making payments on a court-instructed repayment plan.

Bankruptcy will harm your credit score, so consider all your options before filing. Chapter 7 bankruptcies remain on your reports for ten years, whereas Chapter 13 up to seven years. Last, if you anticipate other medical bills soon, hold off on filing to round up the final cost.

advice on dealing with medical debt and settling it 1
Photo by Karolina Grabowska

Setting up a payment plan, asking for assistance from various programs, or borrowing cash are some of the ways to deal with medical debt in the US.

Medical Debt Payoff Options To Avoid

Being proactive is vital to get medical debt relief. Yet, some solutions sound good but are either beyond your reach or could worsen your financial situation. When possible, avoid the following two strategies.

Taking Money From Your 401(k) And Retirement Plans

Proving medical hardship might waive the 10% penalty paid on early 401(k) or IRA withdrawals. Still, 401(k) plans are off-limits for creditors in bankruptcy, so avoid using these funds when circumstances allow.

Also, when you opt for withdrawal from retirement savings, you’re depriving yourself of some valuable assets in the future. Suppose you’re 35 and withdraw $20,000 from your Roth IRA for a hospital bill. You might lose nearly $115,000 by the time you reach 65, taking into account the average annual returns of 6%.

Consolidating Medical Plans

Having several medical bills at once may tempt you to consolidate them with a single loan. Making one payment a month can indeed be far more manageable for some borrowers.

Still, medical bill consolidation involves taking out a new line of credit to pay off your current debt. The borrowed funds will cover the existing debt, but you will start paying off the new account.

Of course, your goal would be to simplify payments or pay less interest than on your current accounts. At this point, it’s vital to remember that medical debt doesn’t accrue interest or at least carries favorable rates. So, consolidating debt with an interest-accruing loan will cost you more money overall in the long term. Overpaying is almost certain if you have to pay origination and other fees to take the new loan.

Understanding Medical Debt Relief During Covid-19

Many measures were introduced to tackle the financial and medical emergency created by the COVID-19 pandemic. In short, many states strive to help with health insurance. They also protect residents from aggressive debt collection measures.

Usually, to receive COVID-19-related relief or medical debt forgiveness, you should inform your creditor of your situation. Specify that you’re experiencing hardship due to the coronavirus pandemic.

Federal law stipulates that comprehensive health insurance plans must drop the cost-sharing component of COVID-19 testing. Some states urge health insurers to expand coverage on COVID-19-related services further. For more information on individual state actions, visit their pages.

Low-income folks eligible for Medicaid should check their state’s rules for retroactive funding. This way, they can extend Medicaid coverage to the previous 90 days. For example, Massachusetts made healthcare more accessible during the COVID-19 pandemic. The state allows coverage for medical bills received in the last three months.

To check whether you qualify for COVID-related medical bill relief, do an online search. Also, visit your state’s attorney general or insurance division to get information on your options.

Final Words

Facing unexpected medical bills you can’t afford to pay can happen to anyone.  However, if you’re planning to get medical care, explore your payment options carefully. Verify what your insurer covers and which healthcare providers are within the network.

Most importantly, don’t postpone treatment because of the bill. The more you put off the procedure, the more you’ll pay, and it could cost you your health.

What about you? Have you ever faced an exorbitant medical bill? How did you manage to foot it? Share your thoughts with our readers and sign up for our newsletter for more budget-friendly advice.


How do you get medical debt forgiven?

The best way to seek medical debt forgiveness is to call or visit your hospital’s billing department. Ask if you qualify for any debt-reducing strategies like financial aid programs. You’ll be more successful in your attempts if you have a disability or apply through a nonprofit organization.

How can I settle the medical debt for less?

The best approach to settle your debt is with the healthcare provider. If this fails, try negotiating with the collections agency to lower the amount of your debt. Offer to pay a portion and sign a settlement agreement. You may get approved to make monthly payments on the settled amount.

What to do if I can’t pay my medical bills?

First, never ignore your bills after they arrive and ensure the billed charges are accurate. Then, see if you can negotiate an interest-free payment plan or seek a prompt pay discount. If this fails, apply for financial assistance or a loan. Your last resort is to deal with collection agencies.

How do you get medical collections off your credit report?

Medical collections can contain errors or inconsistencies. So, if you reckon your medical debts got reported inaccurately to the credit bureaus, dispute them with each credit bureau. If the collection agency verifies your claim, you can get them removed from your credit report or updated.



    22 thoughts on “How To Deal With Medical Debt When You Can’t Pay Right Away

    1. Cloe says:

      It is really difficult when you have a lot of unpaid medical bills. You have to borrow some money to pay them.

    2. Mirina says:

      It is very important to pay your medical bill on time.

    3. Helen says:

      We have a lot od unpaid bills recently. However medical bills should have different treatment than the others.

    4. Asad says:

      If there is a medical emergency it is better to borrow some money from friends and family rather than borrowing from bank

    5. Melita says:

      You can negotiate with the doctors to make a payment plan that you can pay on time

    6. Rose says:

      Medical expenses are burden to the home budget but unfortunately you can not avoid them

    7. Xena says:

      Having good health ins. is essential. You always have a medical emergency

    8. Dina says:

      Most of us at some state have to pay enormous medical bills for themselves or for the member of the family.

    9. Letizia says:

      Failing to pay medical bills is the same as failing to pay installments in the bank. It has the same consequences.

    10. Alisson says:

      Your credit score can be ruined with medical unpaid bills same as everything else

    11. Barry says:

      Although medical expenses are not our choice, we have to make sure to pay them on time.

    12. Alex says:

      Filing for bankruptcy due to unpaid medical bills if those are huge sometimes is the best option. Although it can ruin a lot of other things in the longer run

    13. Caleb says:

      Very nice article thank you. We should know where to go for a help when we come in this situation.

    14. Addison says:

      Medical bills are really problem when you don’t have money. But you are right, you should not ignore the problem

    15. Holland says:

      It is important to check your medical bills because they can make mistakes and you will finish owing more than you should.

    16. Moira says:

      Avoiding to pay medical bills can make you a big problem. It is better to settle with the hospital and make a payment plan and stick with it.

    17. Landon says:

      Double billing is something that the departments in hospitals regularly do. Check the medical bill before signing and check all that you will have to pay.

    18. Darwin says:

      Hopefully I will have enough money to pay my medical bill in emergency

    19. Pierce says:

      You can take some money from your retirement fund if you need to pay emergency medical bills

    20. Gia says:

      You can borrow some money to pay your medical expenses if there is an emergency

    21. Bornea says:

      You can pay your medical bill with plastic if you have one

    22. Soraya says:

      Medical bill can get discharged in bankruptcy so if you do not have other option and you can not pay the bills, this is smart thing to do.

    Leave a Reply

    Your email address will not be published. Required fields are marked *