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Life After Bankruptcy

Dealing With Medical Debt

medical bills Unpaid medical bills can wreck your credit and lead you to bankruptcy. According to AARP, 1.85 million Americans go bankrupt in a year due to medical bills. When insurance doesn't cover all your medical expenses, you have to. If your physician doesn't get payment from you or your insurance company, he'll turn your account over to a collection agency who will try to get you to pay.

Once the collection agency has your medical bill, it will pull out all the stops to get you to pay - calling, sending letters, and even reporting your overdue bill to the credit bureaus. A collection account indicates a serious delinquency. The unpaid medical bill ends up damaging your credit score and your ability to get credit cards and loans for the next seven years. Bankruptcy can hurt you for up to 10 years.

Video: Negotiating medical debt and unfair medical billing

Medical Debts and Lawsuits

You can be sued if you don't pay your medical bills. If the hospital or debt collector wins the lawsuit, you can have your wages garnished. (These states don't allow wage garnishment: North Carolina, Pennsylvania, South Carolina, and Texas.)

Don't ignore a medical bill lawsuit notice. If you do, the hospital automatically wins. If you receive a lawsuit summons, seek assistance from an experienced attorney to find out how you should proceed.

Children's Medical Bills

As a parent, you're responsible for paying for your minor child's medical bills. When you took your child to the hospital, you likely signed paperwork stating that, as the parent/legal guardian of the child, you accept financial responsibility for services not covered by insurance. Just as with your own medical bills, you can be sued for your child's unpaid medical debt.

Get Help Paying Your Medical Debt

There are quite a few resources you can use if you can't afford to pay your medical bills.

Work with the hospital. Most people don't realize they can settle medical debts directly with the hospital. Do this as soon as you receive the bill to keep the debt from being assigned to a debt collector. Contact the hospital's billing office to discuss payment arrangements based on your ability to pay.

Use government programs. Your hospital bill may be covered by Medicaid or Medicare, two government health insurance programs. If you were not enrolled in either at the time of service, your bill can be retroactively covered as long as you enroll in one of the programs within three months of medical service. You qualify for Medicaid if:

  • You are over 65
  • You receive or are eligible to receive Social Security or Railroad benefits
  • You or your spouse was covered under Medicare at a government job

Certain individuals under the age of 65 with disabilities or end-stage renal disease can receive Medicare benefits. Visit or call 1-800-663-4227 to find out more about Medicare.

Medicaid is a needs-based program that's managed by your state's health department. Each state sets its own guidelines about eligibility and services provided. You can use the Center for Medicare and Medicaid Services (CMS) website or call 1-877-267-2323 to get your state health department's contact information.

Seek out a charity. Community-based charity programs may help you pay your medical bills. You can find federal, state, local, and private programs by visiting

Use a medical credit card. A few large health insurance companies partnered with banks to offer health care credit cards that can be used to fill the insurance gap - the difference between what you owe and what your insurance company pays. Though having a high credit card debt isn't the best idea, it's better than the alternatives of harassment from debt collectors, wage garnishment, and bankruptcy.

Take out a consolidation loan. Depending on your credit rating, you may be able to take out a loan to consolidate your medical debt. Contact your bank to find out whether you qualify for a loan or fill out the form above.

Medical bills can be quite overwhelming, making it may seem like bankruptcy is the only option. It isn't. Because of the life-altering effects of bankruptcy, it's best to exhaust all the other alternatives available. You'll be surprised - and relieved - to see just how much help you can get with your medical debt, call 888-314-1403 to speak with a certified counselor.

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