Be very careful before taking out debt consolidation loans for unpaid medical bills. You are merely shifting the obligation to a different creditor and imposing strict repayment terms on yourself.
A debt relief program could be a better option becuase you could reduce the amount of money you pay to satisfy leftover doctor, hospital, and dental expenses. On the other hand, the impact to your credit score is a consideration.
Learn the pros and cons.
Medical debt often appears as negative payment history on credit reports, which then affects generic risk scores used to make lending decisions. Leftover medical bills will continue to increase as health insurance policies migrate to larger deductibles and smaller provider networks.
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Financial Help for Medical Bills: Grants & Government Programs
Find what limited resources are available in your state for financial assistance if you are having difficulty paying medical bills, or need income support while taking unpaid leave from work.
Private companies, government agencies, and charitable organizations offer more than 50 different programs that can help patients with prescription drug costs and more.
Texas Statute of Limitations: Debt & Medical Bill Collections
Parents having children are not the only group needing financial assistance with medical costs. Many patients find themselves with surprise balance bills from out-of-network doctors or hospitals.
Texas has a comprehensive set of consumer protection laws that can minimize your exposure to surprise charges. They also place restrictions on methods used by collection agencies.
Illinois Hospital & Medical Bill Laws (Statute of Limitations)
Medical billing laws in Illinois offer limited legal rights to patients who struggle to pay unreimbursed hospital and doctor expenses. The statutes of limitations and other rules could help your case.
Consolidation programs are not a silver bullet, either. However, charity care and Medicaid offer a glimpse of hope to some.
Do Unpaid Medical Bills Affect Buying a House?
A negative medical debt credit history can follow you around like a bad penny. It may even affect you when trying to buy a house.
Mortgage lenders will consider your debt to income ratio, your credit score, and other factors when evaluating your application. The amount you owe doctors, dentists and hospitals do not help your cause.
What Happens When You Don’t Pay Medical Bills?
What happens if you do not pay dental, doctor, or hospital bills? The consequences are minor at first as providers often wait for the insurance company to process claims.
However, the fallout escalates once the provider refers your account to collections. Hits to your credit score and/or lawsuits can follow quickly.
Medical Debt Consolidation Programs vs Loans
Former patients and the families have two choices when attempting to consolidate unpaid medical bills.
First, debt relief programs combine your payments into a single escrow account. The companies use the accumulated balance to make a settlement offer.
Second, lenders may approve a new loan that allows you to pay off dentists, doctors, or hospitals. Repay the lender over time with installment payments.
After Health Insurance Pays Medical Bills
May patients are surprised by the amounts still owed after health insurance pays the doctor or hospital bills. In-network cost-sharing features such as deductibles, copayments, and coinsurance add up quickly.
The size of balance bills from out-of-network providers are often a shock. New laws may help you to fight back.
How Medical Bills Affect Your Credit Score
One of the biggest challenges of obtaining a debt consolidation loan for unpaid medical bills is that they frequently appear on your consumer report. Once there, they often suppress your credit score, which makes it very difficult to qualify.
A settlement program does not have a minimum credit score requirement and may prove a better option if your history is already tainted.
Does Old Medical Debt Go Away After 7 Years?
It would be nice if old medical debt would just go away after a set period of time. It seems unfair that a person with health problems should suffer a second financial penalty.
State laws regarding the statute of limitations, bankruptcy, and the estate issues upon the death of the person offer different levels of relief. Learn your legal rights.
How to Negotiate Medical Bills in Collections
Negotiating a lower settlement on your unpaid medical and hospital bills in collections will save you far more money than taking out a consolidation loan. Try this avenue first.
Combining your obligations into one payment and stretching out the terms does not reduce your obligations. Origination fees and interest charges only serve to make it grow.