How to handle medical debt

Step-by-step guide to tackle your bills, plus 4 tips to negotiate with creditors.

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Is medical debt weighing down your life — and your credit score? If you’re ready to conquer your debt and straighten out your finances, start by creating a plan that helps you understand the full scope. Then you can take steps to dismantle it one bill at a time.

What should I do when I’m facing medical debt?

Medical debt can be overwhelming, especially when you’re trying to tackle other types of debt as well. Rather than ignoring it, here’s a step-by-step guide to confronting medical debt head on:

Step 1. Gather your outstanding bills

This can be one of the most difficult parts. Find every bill from each of your providers and put them all in one place. Next, check which ones are actual bills sent by a provider and which are explanations of benefits (EOBs) sent by your insurance company. Separate them, and move on to Step 2.

Step 2. Make sure your bills are accurate

Medical bills aren’t always accurate. Sometimes a provider enters the wrong code or a claim is filed incorrectly, putting you on the hook for a procedure you didn’t have or money you don’t owe. Go over your bills and EOBs with a fine-toothed comb, and reach out to your doctor’s office or insurance company to clear up any mistakes.

Step 3. Check how insurance has been applied

In addition to checking for accuracy, check what procedures your insurance covered and how your copay was applied. You’ll need to know what your policy covers to make sure everything is accurate, so review it alongside your bills to fully understand the scope of your situation.

Step 4. Put your bills into a spreadsheet

You can enter everything into a spreadsheet — good for those who don’t want to do too much math — or simply stick to pen and paper. Whichever you choose, list all of your bills from oldest to newest, noting any that have already been sent to collections.

This will help you see how much you owe and to which providers. If you decide to pursue debt consolidation, you’ll know the amount you need without worrying about borrowing too much or too little.

Step 5. Know your rights

Once your medical debt has gone to collections, it’s treated like any other debt. But before it reaches that point, try to discuss a payment plan with your provider. If you receive a payment plan agreement in writing, your medical provider can’t send your bill to collections as long as you’re making repayments on time — even if they’re just $25 or $50 a month.

If it’s too late and your bill has already gone to collections, you still have rights. Read up on the Fair Debt Collection Act, which outlines what is and isn’t allowed during the debt collection process.

What is the statute of limitations on medical debt?

A statute of limitations (SOL) is the period where legal action can be pursued. For medical debt, this is the time frame a collection agency has to sue for money you owe on an outstanding bill. The SOL begins on the date of your last payment, and there are certain actions you can take that resets the clock. Making a payment or even acknowledging that you owe money may restart your debt’s SOL, so consult an attorney to discuss your specific situation.

Find out the statute of limitations on debt in your state

Watch out for medical collection scams

Not all debt collection is aboveboard, which is why knowing your rights is critical. Medical debt collections fall under the same scope as all other collections. This means a medical debt collector can’t call you outside of normal hours, threaten you with jail time or force you to pay immediately.

There are also a few scams you should be aware of:

  1. You don’t recognize the account. If a collection agency contacts you about a procedure or doctor’s visit you don’t have any record of, it might be a scam. Request proof of the bill and check it against your own records. Even if it’s legit, if it’s been over seven years, the debt might be past the statute of limitations in your state.
  2. You can’t find any information on the collection agency. It’s not uncommon for medical offices to sell debt to a collection agency, but if you can’t find any solid details on the one contacting you, it could be a scam. It’s best to call your provider and ask where it sold your bills so you can confirm the debt collector is legit.
  3. You’re pushed to pay as soon as possible. Scam collection agencies typically want you to pay quickly — usually with threats of jail time or lawsuits. Take note of this and the name of the collection agency, and cease contact until you’re sure the collectors you’re dealing with are the real deal.
  4. You’re asked to pay via wire transfer. Legitimate debt collection agencies usually only accept payment via check, debit card or credit card — methods that can be easily traced. If you’re asked to pay through cash or wire transfer, you may be dealing with a scam collector.

Step 6. Create a plan to tackle your medical debt

Once you’ve made sure your debts are accurate, your insurance has been applied correctly and the debt collection agency is legit, it’s time to make a plan. Use the spreadsheet you made and consider a method to eliminate your medical debt. As you go, mark dates paid and the names of anyone who provided assistance. Keep plenty of records, and reach out to the billing agency or collection company if you notice your payments don’t go through.

Options for tackling medical debt

When you’re ready to put your plan into action, there are a few ways to start dealing with your medical debt:

  • Negotiate what you can. Prices on medical services aren’t fixed. If you’re able, contact your provider’s billing department and see if they’re willing to put you on a payment plan or lower your total bill. And if you aren’t comfortable negotiating, you could find a company to do it for you.
  • Ask for a financial hardship plan. Some hospitals and doctor’s offices are willing to set up a payment plan based on financial hardship. If you’ve been struggling with your budget and aren’t able to make repayments, reach out and discuss your options.
  • Compare medical loans. Medical loans are one of the most useful tools for handling medical debt. You can use one to refinance debt you already have, which may lower your interest rate or make your monthly payments more affordable.
  • Apply for a balance transfer credit card. A balance transfer credit card works similarly to a medical loan. You can use yours to consolidate multiple monthly payments into one.
  • Find nonprofit assistance. There are many charities and nonprofits dedicated to helping families in need — especially those with children — handle medical debt. Some good places to start include RIP Medical Debt, the CancerCare Copayment Assistance Foundation, the Patient Access Network (PAN) Foundation and the HealthWell Foundation.
  • Consider Medicaid. If you’re uninsured and on a low income, you may be eligible for Medicaid. This can help make the cost of future health care more affordable, but it won’t help with the medical debt you already accrued.
  • Request Charity Care. Like Medicaid, Charity Care won’t be able to help with medical debt you already have, but it can make future care more affordable. To get started, speak to a local hospital or healthcare facility to see if they offer free or reduced-cost programs for individuals on low incomes.
  • Look into bankruptcy. Although it can help you deal with your medical debt, bankruptcy should be a last resort. This can impact your credit and ability to get loans for years to come.

Compare providers to consolidate your medical debt

Updated December 15th, 2019
Name Product Costs Requirements
Freedom Debt Relief
Monthly payment based on enrolled debt, no upfront fees
Must have at least $7,500 in unsecured debt and live in a serviced state.
Freedom Debt Relief is a debt settlement company that works to help people with unmanageable, unsecured debt get back on their feet.
National Debt Relief
18–25% of total enrolled debt
Must have a legitimate financial hardship which is preventing the ability to pay creditors and a minimum of $7,500 in debt.
Get back on your feet with a top-rated debt relief company that works with multiple types of debt.
Consolidated Credit Debt Relief
Fees regulated by client's state of residence, can range from$0 to $69 with an average monthly fee of $35. No upfront or contingency fees.
Debt must not be payday loans or secured loans.
This debt settlement alternative can help you find a path to financial freedom.
Accredited Debt Relief
Charges and fees vary by the company you're ultimately connected with
Must be at least 18 years old and a legal US resident; additional terms may apply based on services and products used.
This A+ BBB-rated service offers free consultations to lower your monthly payments help you get out of debt faster.
CuraDebt Debt Relief
20% of enrolled debt or less, no upfront fees.
Must have verifiable income and more than $10,000 in unsecured debt or tax debt — excluding payday loans.
This company claims to significantly reduce your consumer and tax debt.

Compare up to 4 providers

Updated December 15th, 2019
Name Product Filter Values APR Min. Credit Score Max. Loan Amount
Credible Personal Loans
5.95% to 35.99%
Fair to excellent credit
$100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Fiona Personal Loans
3.84% to 35.99%
Good to excellent credit
$100,000
Get loan offers from multiple lenders at once without affecting your credit score.
Upgrade Personal Loans*
6.98% to 35.89%
600
$50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Even Financial Personal Loans
3.84% to 35.99%
550
$100,000
Get connected to competitive loan offers instantly from top online consumer lenders.
NetCredit Personal Loans
34% to 155% (Varies by state)
No minimum
$10,000
Check eligibility in minutes and get a personalized quote without affecting your credit score.
Monevo Personal Loans
3.99% to 35.99%
450
$100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
PenFed Credit Union Personal Loans
6.49% to 17.99%
650
$25,000
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
LendingClub Personal Loan
6.95% to 35.89%
640
$40,000
A peer-to-peer lender offering fair rates based on your credit score.
SoFi Personal Loan Fixed Rate (with Autopay)
5.99% to 17.88%
680
$100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.

Compare up to 4 providers

Before you sign up with a debt relief company

Debt relief companies typically charge a percentage of a customer’s debt or a monthly program fee for their services. And they aren’t always transparent about these costs or drawbacks that can negatively affect your credit score. You might pay other fees for third-party settlement services or setting up new accounts, which can leave you in a worse situation than when you signed up.

Consider alternatives before signing up with a debt relief company:

  • Payment extensions. Companies you owe may be willing to extend your payment due date or put you on a longer payment plan if you ask.
  • Nonprofit credit counseling. Look for free debt-management help from nonprofit organizations like the National Foundation for Credit Counseling.
  • Debt settlement. If you can manage to pay a portion of the bill, offer the collection agency a one-time payment as a settlement. Collection agencies are often willing to accept a lower payment on your debt to close the account.

4 tips for negotiating medical debt

Ready to talk to your medical provider or creditor? Here are top tips for negotiating:

  1. Try to reduce the amount you owe. Medical debt often comes with more than just the cost of a procedure. Look line by line for added fees that you could get waived.
  2. Ask for a discount. If you don’t owe a large amount, see if your provider will give you a discount for paying a lump sum. You’ll have an agreed-upon amount of time to pay it off, and it may also help to reduce the total amount you owe.
  3. Request a payment plan. For those who owe more, a payment plan is generally a good idea. Many providers are willing to work with you to create a plan that fits your budget. State your limitations outright and try to come to a compromise that gets your bills paid without emptying your bank account.
  4. Hire a medical billing advocate. A medical billing advocate is a professional who can help you with the negotiation process. It may be a costlier option up front, but they’ll know all the laws and actual costs of procedures to help you get a good deal.

How does medical debt affect my credit score?

If you have unpaid medical debt that’s been sent to collections, it can drastically harm your credit score. But until it reaches collections, it won’t have much of an impact at all. In fact, medical providers usually can’t move your bills into collections until 90 to 180 days after nonpayment. To learn more, read our guide to how medical debt impacts credit.

Can medical debt be inherited?

It depends on your state, but in many cases, the answer is yes. This is because nearly 30 states across the US have filial responsibility laws, which allow creditors to contact children of the deceased for any medical bills that aren’t covered by estate assets. Creditors usually have between two to six months to make a claim against the estate. Check your state’s laws and speak with an estate lawyer about your specific situation.

Must read: Am I responsible for my spouse’s medical debt?

If you live in a community property state, you may be responsible for your deceased spouse’s medical debt — even if you didn’t cosign it or act as a guarantor. However, the exact wording of your state’s laws will determine your responsibility. The easiest way to find out is to consult with an estate lawyer and discuss your specific situation.

Bottom line

The first step to conquering medical debt is organizing your bills and figuring out exactly how much you owe. From there, you can start negotiating with your creditors, look into nonprofit assistance programs or refinance your debt with a lower interest rate or better terms.

To compare your options, check out our guide to medical loans or explore more debt relief services.

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