Medical Costs: Dealing With Debt

For those who are uninsured or under insured, it is difficult to steer away from medical debt when a family member's health demands medical assistance

. It is an everyday occurrence in our nation to have medical debt overloads someone's finances. Know what options are available to you and make one work before the debt goes to collections.

For starters, talk to your medical care provider prior to services being rendered. Emergency medical assistance does not lend itself to this option, but you can contact the provider as soon as your health allows. Most doctors are willing to listen to people's situations and will work out payment plans. If the debt is beyond your means, the billing office may negotiate the debt especially for those without or have too little insurance. Call and talk to the doctor's office directly or in some instances, the billing department. With so many people with debt problems billing departments are more willing to work with payment options in order to get paid. If the person you speak to is not aware of a payment option, do not assume there is not one. Talk to other people in the office until you find someone who can work with you.

Some people have found that transferring medical debt onto credit cards makes it easier to pay. This will spread the payments out long-term. A down side to this option is that credit cards earn interest on your balance each month. You will not want to place your medical debt onto a credit card unless you know you can pay it off in a reasonable amount of time. Interest payments add up fast. Another down side to this is if you are planning on applying for Medicaid assistance, any transfer onto a credit card will no longer be counted as medical debt; it will now be credit card debt.

Consolidating your debt is an option that some people choose to do if they own their own home and have built up some equity. Taking a loan out against that equity is one way to pay off your medical debt. The interest is usually much lower on this loan, but you mortgage payments will increase. One major down side to this option is that you will be turning unsecured debt into secured debt. If you fail to pay on this secured loan, you run the risk of losing your home. Be careful with this option.

There is credit counseling companies who will work to get you started on a working budget and educate you on how to manage and maintain your finances. Shop around for a company who can show proof of certified training for the counselors on consumer credit, debt management and budgeting.

The last option should always be the final place to look for debt relief. Bankruptcy is an option for those who are overrun with medical debt. If you are going to have continued medical coverage and the debt will come back, bankruptcy will only offer temporary relief. If your medical costs will be on going, you may want to contact the medical provider and work out a payment plan. Bankruptcy carries with it many consequences and can interfere with finances for a very long time. Be certain that this is the only remaining option for you before you hire your lawyer.

by: Jen Smart

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