How Do I Get Out of Medical Debt That I Can Never Afford to Pay Back?

For people without health insurance who face a major illness or a serious accident, the bills for medical treatment can quickly grow to the point that they are impossible to pay. Even for the insured, the co-payment amounts may be high enough to cause severe financial problems. You end up with more medical debt than you will ever be able to pay. In these cases, you may have no other choice but to try to eliminate these debts without paying them in full.

Instructions

1

Contact the hospital and other medical providers as soon as possible to talk about the situation. If you are suffering from a chronic, or ongoing, illness this is even more important, as you will continue to incur bills as you undergo treatment. Try to get the hospital and your doctor's offices on payment plans as soon as possible to keep everyone at bay until you are at a point health-wise where you can begin to work your way out of these debts.

2

Schedule an appointment to speak with the hospital administrator. It may be best to bypass the billing department, especially if your bill is exceptionally large. Gather any assets that you may have available to put towards the bill. Approach the administrator with a spirit of thankfulness, not entitlement. If the hospital has helped you or a family member, you want to show your appreciation for their help. After this, make an offer to the administrator to settle the debt for whatever assets you can commit to the payoff. The administrator may accept the offer, even if the offer is just a small portion of the total bill.

3

Approach the doctors to whom you owe money in the same way that you approached the administrator of the hospital. Let them know that you appreciate their services, and that these services are worth more than the doctor's fees. In spite of this, make the doctor aware of the realities of your financial situation. A doctor may be willing to work with you as well to reach a solution that you can afford, perhaps negotiating a large discount on your bill.

4

Negotiate a payment arrangement with the hospital and doctors if they will not accept a discounted lump sum settlement. Prepare your own budget and determine exactly what you can allocate to payments. Share this budget with the doctors and hospital administrator, then offer this amount in monthly payments to your providers in proportion to the debt that you owe. If you owe the hospital 80 percent of your medical debt, and 20 percent to a doctor, split your payment up appropriately. Of a $200 per month payment, you would offer the hospital $160 and the doctor $40.

5

File for bankruptcy if you are unable to negotiate either lump sum settlements or acceptable payments. Chapter 7 bankruptcy may be your best option if you do not have many assets, or all of your assets are exempt from bankruptcy. This will discharge all of your unsecured debt, including medical debt. If you have assets to protect, a Chapter 13 bankruptcy will allow you to work out a court-supervised repayment plan that will pay a portion of your debts over a five-year period, and discharge any remaining balance.