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How can you handle overwhelming medical debt?

Medical debt that has gone to collections can be frustrating. Did you know that around 80% of those who filed for bankruptcy due to medical debt actually had health insurance? It may not be surprising considering the high cost of deductibles, out-of-pocket co-payments and other expenses.

If you are in debt from medical procedures or a medical emergency, the top tip to remember is not to ignore those debts. They can go to collections, and they can impact your credit. Most medical providers won't wait more than a few months before sending you to collections.

What happens if a medical debt goes to collections?

If the debt goes to collections, it begins to hurt your credit. You could also be sued for the debt, and that can result in wage garnishment, a bank levy or judgment against you. All of these things can hurt your ability to obtain credit and loans.

How can you address debt you can't afford to pay off before it heads to collections?

In most cases, the hospital or provider will work with you. Tell them what you can afford to pay each month and take steps to make payment arrangements. You can also double-check with your insurance provider to make sure that the bill you received was correct and that the amount left is what you owe.

You can also ask if your bill can be lowered if you pay a lump sum. Sometimes, offering to pay 75 or 80% of the bill in cash will be enough to negotiate a discount.

Your attorney can talk to you more about options, including bankruptcy, that may be beneficial to your situation.

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