A medical emergency requires immediate evaluation and treatment. However, such measures can be expensive. If you lack sufficient health insurance coverage, you could be responsible for thousands of dollars in medical bills, sinking you into seemingly inescapable debt.
If reported to a credit bureau, medical debt can negatively affect your credit score. This reduces your borrowing capability and may impact seemingly unrelated areas of your life, such as your ability to get a job. However, health care facilities generally do not report medical debt directly to credit bureaus, although a collection agency to which the provider forwards it may do so. Even if it does go to a credit bureau, new rules as of 2017 grant you credit protections such as a grace period of 180 days before listing medical debt on your credit report.
Bankruptcy is one way to discharge medical debt. However, before it gets to that point, there are other ways that you may be able to manage it.
1. Negotiate an alternate arrangement
Contact the entity administering your debt, whether it be a collections agency or the health care facility. Explain your situation and see if you can arrange to pay what you owe in installments or settle for a lower amount. If you have considered filing for bankruptcy a possible outcome, let your creditors know. They may be more willing to negotiate with you in the interest of recouping more of their losses.
2. Prioritize other debts
Due to the protections that the new rules afford you, medical debt can have a less damaging effect on your credit than other types. If you have other debts, prioritize paying them off first.
3. Do not use credit cards
A credit card may seem like a way to make the problem of medical debt go away. However, credit card companies impose high interest rates and late fees, and medical creditors typically do not. Therefore, using that line of credit to pay off your medical debt could end up making your problem even worse.