How to Pay Off Medical Debt

Medical debt can accumulate regardless of whether you have insurance or not. Unexpected illness or injury is a major cause of medical debt along with high deductibles and co-pays. Although most medical doctors and hospitals do not report to the credit bureau, if left unpaid medical debt can have a negative impact on your credit score when turned over to a collection agency. Not ignoring medical debt is the key to avoiding long-term financial problems.

Instructions

1

Contact the medical office, hospital or lab involved with the medical debt as soon as you receive the first bill or statement. Do not wait until it is sent to collections. These facilities have trained professionals who can help you work out a payment plan and offer the names of state and federal programs that can help you pay your debt.

2

Ask for a settlement for a payoff. Many medical facilities offer a discount or settlement amount if you are able to pay the amount in full. Even if you cannot pay the full amount, ask for a reduced total to make your monthly payments lower.

3

Use the equity in your home. If the medical debt is on several accounts, using the equity in your home to combine the payments into one might help you save money if the medical bills charge interest. Plus, this can save money considering a home equity loan's interest is tax deductible.

4

Use a flexible spending account (FSA) set up through your employer. A certain amount of your paycheck is put into the account automatically. The money is pre-tax, so it saves you money in the long run.

5

Apply for a credit card or use one you have that has a low interest rate. Some cards offer an introductory period with a zero interest rate, which is a good idea for paying medical debt.

6

Get a consolidation loan. If you have other outstanding loans that you can combine into one, a consolidation loan might save you money on monthly payments and interest.