Debt Relief for Medical Bills
Healthcare costs are on the rise, and with average daily hospital expenses being around $3,949 per person, medical bills can add up quickly. Since medical bills are considered unsecured debt and do not require collateral, people can easily find debt relief options. While medical bills hardly ever offer financial aid, people feeling overwhelmed can get a personal loan, consolidate, or settle the debt to help.
Debt Relief For Medical Bills
Personal Loan or Consolidation Services
The most common ways to help pay for medical bills are with debt consolidation, and an unsecured personal loan. These processes involve a bank or another lender looking into the client’s financial situation, employment, credit rating, etc. People often look toward debt relief options to get lower interest rates on their medical bill payments. Personal loans can act as a way to prevent medical bills from going unpaid and getting sent to collections.
Consolidation Program
A debt consolidation program can also help with medical debt. With the client’s approval, the company will contact the hospital, doctor, and healthcare providers to negotiate a lower interest rate and monthly payment. A consolidation program can also help people organize and manage their bill payments, all with a lower interest rate.
Debt Settlement
Medical debt settlement is for people dealing with unpaid medical bills. Companies can help customers by negotiating paperwork, and settling, resolving, or figuring out an alternative payment plan for the remaining medical debt. Debt settlement can act as an alternative to bankruptcy.
Unpaid medical bills are sent to collections — a process that can significantly lower one’s credit score. Because of this, it is important to get a handle on medical bills before they have to go to collections.
Unsecured Debt
Medical bills are considered unsecured debt, which is why they are more likely to be accepted into debt relief programs. Other bills including: credit card debt, personal loan debt, utility bills and apartment costs, and business loan debt are all considered unsecured debt. These kinds of debt do not require collateral and are thus typically accepted into debt consolidation and settlement programs.
Secured Debt
It is harder to find debt relief options for secured debts, because they require collateral. A lot of debt settlement and consolidation programs do not work with secured debt, like mortgages or auto loans.
People having trouble paying their medical bills should seek help before it is too late. Debt relief programs can help people achieve lower and more affordable interest rates and monthly payments, and prevent medical bills from having to enter collections all together.
Sources:
https://www.debt.org/medical/
http://www.needhelppayingbills.com/html/consolidate_medical_debt.html
http://www.needhelppayingbills.com/html/medical_debt_settlement.html
- Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
- Negotiates with your creditors on your behalf.
- Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
- Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
- Combines all your debts and creditors into one monthly payment.
- Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
- You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
- Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
- Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
- Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
- Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
- Borrowers can receive funds from their loan within only a few days.
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