Have Medical Debt? A Few Options for Dealing with It!

Medical expenses that are unexpected can really wreck havoc on your financial situation.  Unfortunately, it is something that almost no one is prepared for. The truth is that even if you have medical insurance, if you or a family member faces serious illness, chances are you are going to be left with huge medical bills.  If you have medical bills that are beyond what you can pay, you have three main options for how to deal with them.  They are:  filing for a medical bankruptcy, negotiating the debt or attempting debt consolidation.

You might be surprised to learn that some 60% of all bankruptcies are the direct results of medical expenses. Even more shocking is that most of the people that end up filing bankruptcy due to medical expenses actually have some sort or medical insurance.  If you are contemplating filing a medical bankruptcy, there are several things which you will want to consider.  The most important thing to realize is that although you may have heard of the pending legislation that would change this, at the present time there is no distinction between a medical bankruptcy and a regular bankruptcy.  So, if you want to file for a Chapter 7 all of the standard rules will apply for you.  You must qualify in the same manner you would if you had simply amassed a massive amount of credit card debt. You also should understand just how significantly filing for bankruptcy will impact your life for the next 10 years.

Another option that you may have heard a great deal about is debt settlement.  Debt settlement is popular for credit card debt, but it can apply to any unsecured debt such as medical debt.  This is where you negotiate directly with the creditor for them to accept an amount that is less than the full balance that you owe.

The third alternative is medical debt consolidation.  While this is certainly an effective method to save your credit rating, it is not without its risks.  In almost all situations, medical debt consolidation requires that you used your home as collateral.  You need to carefully consider whether putting your home at risk is a wise decision for you.


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