Even with medical insurance, many Americans nevertheless still struggle with medical bills. Medical debt sours the credit record and lowers the score, both in Arkansas and nationwide. Most people live on a very tight budget that cannot handle a substantial extra bill that was not budgeted.
With insured persons struggling with medical debt, clearly there is a greater problem for the uninsured. Those without insurance get billed at the highest, often most shocking rates. The person who has a medical debt problem may want to look at the following possible resolutions.
When the bill first arrives, one can try to settle with the hospital. It may have a program for financial assistance to needy patients. If the amount is not overwhelming and there is not a mountain of other debt, a person can inquire about a payment plan. If that doesn’t get it done, the bill will go to a collection agency.
At the collection agency, the bill generally becomes a lost cause. It is reported and it affects the credit record and score. Even settling with the agency will not help to undo the damage to the credit record, even if it is marked paid. Going this route is usually fruitless, unless it is a small bill and it is paid instantly, but even then the damage has been done.
A person can pay by credit card or credit line but the ultimate amount will be far higher than the original bill. This only makes sense if there is no other appreciable debt. Otherwise, where there is appreciable, unmanageable medical debt accompanied by other financial debt such as high credit cards, the best option may be to take a look at bankruptcy.
A bankruptcy filing for an Arkansas individual or married couple can get rid of all unsecured debt quickly and completely. Because one’s credit has already been greatly diminished, the bankruptcy does not have a substantial impact. Furthermore, there are proved ways of improving the credit record score after the bankruptcy is completed. Additionally, the bankruptcy generally has a positive effect on new creditors because they prefer to see that the medical debt and other debts have been wiped out.
Source: dailyfinance.com, “4 Ways to Deal With Medical Debt”, Nick Clements, April 29, 2015