There are millions of people in the United States of America who have unfortunately fallen victims to medical debts every single year. For a lot of these people, who do not have any strong health insurance cover, it becomes difficult to manage these bills. Their finances can get crippled with the expenses. Studies have shown that almost 25% of Americans have problems repaying their medical debts. Single medical issues rather any chronic illness caused this problem for many people. Unexpected medical bills can really cause problems for people. In this article, you will learn about how you can use debt consolidation to repay your medical bills.
Things to consider
Before you commit to any debt consolidation plan, it is important that you should consider certain things which can help you understand the procedure of debt consolidation in your case:
1. Will it make any strong financial sense for you?
2. Will these plans help in eliminating your debts or help you go through bankruptcy?
3. Would you accept terms set by these plans and put your assets as collaterals?
4. Will you need professional help and what would it cost you?
Should you be consolidating your medical debts?
You need to understand that medical debt will not be accruing any interest. Your medical debts will all be without interest. You can pay your medical bill off your credit card or take a personal loan, but in this case, you would be paying interest for this new loan. You will not owe your hospital any money now, but you will owe the source of the credit interest amounts that will go on increasing every single month along with the main balance. It is for this reason not preferable for transferring your medical debts if you do not owe money previously to creditors. When you do have previously unpaid medical bills along with other bills, then you can go for a total debt consolidation which will be quite helpful for you.
What should you do before you go for medical debt consolidation?
If you feel like that you cannot pay your medical bills in any way whatsoever, then you need to contact your hospital and doctor who made your bills and discuss these problems. In general, people who do not have medical insurance are billed huge amounts as retails costs which people who have insurance are not required to pay. You can politely explain the situation you are into the health care providers and get a reduction. Hospitals always prefer to get reduced payments rather than no payment at all. You can tell them the amount which you can afford and then negotiate plans, and you can also pay lump sums to the provider and then write the balance off. This will make your bills completed although it can affect your credit scores.
It will be wise for you to review the bills that you have before you contact the hospital. At times, you can also notice some errors and charges which exceed the costs of services that were actually provided. Discuss the excessive charges that you find on the bill and look for extra charges for the treatments that you did not receive at all. You will have to consult your health insurance terms also and see if there are costs that can be covered there and if you are entitled to get certain reimbursements. It will be wise for you to go for detailed reviews of your bills prior to contacting medical treatment providers.
Credit Card Default on Bill Payments
When some people face problems of defaulting on their credit card payments, a lot of debtors choose personal loans for paying their debts off. This method will give them some additional time, but it will bring forth new problems again. You may face the problem of foreclosures. Banks can give you loans with high interests than the debt that you actually owe and this would only be a bad choice in the end.
Medical debt consolidation plans
In the event that you had paid your medical bill with credit cards or if you are not able to repay your bills, then you may consider going in for a debt consolidation plan. You can choose professional debt counselors and debt consolidators to help you in this case but remember to check the background of the company that you choose.
The debt consolidation plans would seek and combine all the different debts which you have accumulated in one single payment. The debt counselor will be reviewing the income and the budget that you have. Then it will negotiate affordable payment plans with the creditors whom you owe money. When they have agreed to go for settlements, then you will be making specific monthly payments through your debt consolidation and management program.
What can you expect from this plan?
In the event that the debt settlement company can negotiate some reduction in the debt amount asides from the consolidation, then it will appear on the credit report that you have and can lower the overall credit score which you have. But this drop in your credit score will be quite low, and it would be less than having a defaulted loan on your shoulders which can lead to bankruptcies.
There are a lot of non-profit credit counseling agencies which do not generally negotiate any settlement with the medical treatment provider. Mostly, they will contact providers with proposals after negotiating settlements with the credit card issuing company. They will propose payments which would get included in the debt management plans. Either way, you can be sure that your medical bills and expenses would get taken care of. But you will have to make your monthly payments on time. You will thus be financially stable. You can find a lot of detailed debt consolidation reviews on the internet.
Debt consolidation plans will help you immensely if you want to repay unpaid medical bills. Hopefully, the information mentioned in this article will have helped you.