How to wipe out medical debt?

October 28, 2022

An estimated 41% of Americans have some form of unpaid medical debt. Further, the Consumer Financial Protection Bureau (CFPB) reported there was $88 billion in medical debt on the credit records of consumers.

However, a recent study from Stanford University suggests that it might be much worse (at least $140 billion). With that in mind, millions of U.S. citizens face medical collections activities and negative information on their credit reports due to an inability to pay medical bills.

At Ziegler Diamond Law, our debt relief lawyers understand the devastating financial impact a medical bill could have on your credit score, ability to get a loan, and many other areas of your life.

If you have outstanding medical bills on which you cannot make payments, we offer medical debt relief services (including help filing Chapter 7, Chapter 11, or Chapter 13 bankruptcy) that may help consumers and families reduce or eliminate medical debts and associated costs.

Contact us today for a free consultation with an attorney you can trust. Continue reading to learn how to negotiate with healthcare debt collection companies, assert your rights, and protect your credit report.

How to Negotiate With Medical Provider or Debt Collector

Suppose you have healthcare expenses (not covered by health insurance), and you owe a debt to a medical provider, but you cannot pay. In that case, all hope isn’t lost.

There are methods to negotiate with medical debt collectors, so your healthcare debt has the least impact on credit scores possible. They include but are not limited to the following:

1. File a letter With the medical debt collection company

Demand they validate your debt. If they can’t show the debt doesn’t belong to you, they must remove it from your credit report. Generally, medical debt collection agencies have up to 30 days to investigate and validate your debt.

2. Search for inaccuracies on your credit reports

If you see any errors (i.e., wrong dates, billing amounts, provider information, etc.), you can dispute the debt and may get it removed from your credit report.

3. Look over the Explanation of Benefits (EOB) from your health insurance

Sometimes, consumers are charged more than they should be, and their healthcare insurance providers aren’t charged enough. This step can help ensure that hospitals are accounting for all payments that your health insurance coverage should have made.

4. Set up a payment plan For Medical Bills

In many cases, a collection agency or medical provider is willing to set up a payment plan for outstanding medical bills before they report it to credit reporting agencies. If your debt has been sent to collections, that doesn’t always mean it will affect credit scoring.

Sometimes, they are willing to work with consumers who don’t have the income to pay by agreeing to a payment plan. However, it’s essential to note that interest and additional fees are likely to occur in the process of paying.

5. Ask for a “pay for delete” payment plan

This means you agree to pay the debt in full if they remove it from your credit report. Depending on the medical debt collection agency, they may also accept a “pay for delete” payment plan.

6. Know your rights

Further, if you have outstanding medical bills but don’t have the resources to cover the costs, that doesn’t give providers, debt collection agencies, or hospitals the right to harass you.

If you believe your consumer financial protection rights have been violated during the debt collection process, we recommend consulting with a proven medical debt relief attorney as soon as possible.

Does Medical Debt Affect Credit Reporting?

Unpaid medical debt can have a tremendous effect on your credit score. Additionally, it can impact your ability to obtain low-interest rate credit cards and loans and qualify for other services. 

With that in mind, medical debt credit reporting is changing for the better:

  • Currently (as of July 1, 2022), the three major credit reporting agencies (i.e., Equifax, Experian, and TransUnion) will no longer report paid medical debts on credit reports. That means they won’t appear even if they were on your report for six months, one year, or many years.
  • Starting in the first half of 2023 (the exact date is unclear), the three consumer credit reporting agencies must change their credit scoring models. This means that, unlike credit card debt, your credit report will not include unpaid medical debt in collections (that cost less than $500) on credit reports.

If your medical bills don’t fall into one of the above categories, that’s okay. There are still ways to potentially wipe out and get rid of your outstanding medical expenses once and for all. Learn more below.

Tips to Wipe Out Medical Debt

Suppose you agree that you owe the medical debts that appear on your Experian, TransUnion, or Equifax credit reports. In that case, there are steps Americans can take to reduce the burden, protect their credit score, and seek the debt relief they need.

These tips include but are not limited to the following:

  1. Negotiate a lower medical bill or set up an affordable repayment plan.
  2. Hire a medical debt relief lawyer to advocate for reduced debts on your behalf.
  3. Apply for “Charity Care” from notable nonprofit organizations. Depending on your circumstances, they may help with most or all of your medical debt.
  4. Request financial assistance from friends and family or via crowdsourcing.
  5. File bankruptcy. Since medical bills are typically considered a “nonpriority unsecured debt,” they are likely to be discharged via a successful bankruptcy.

Need Assistance Getting Rid of Your Medical Debt? We Can Help

Generally, health care in the U.S. is expensive and burdensome to millions of people. Those who cannot pay could face harsh financial consequences, including lower credit scores (TransUnion, Experian, Equifax), countless phone calls from a debt collection agency, and even legal action.

The good news is that the debt relief attorneys at Ziegler Diamond Law are here to help. If you’re struggling to repay medical providers or a medical debt agency, contact us today for a free consultation with our attorneys about your debt relief options. 

author avatar
Michael Ziegler
Ziegler Diamond Law: Debt Fighters, provides effective legal services to consumers in Clearwater, Florida, and throughout the Tampa Bay area who are facing home foreclosure, unmanageable debts, debt collector harassment, or other debt-related problems.

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About the Author

Ziegler Diamond Law: Debt Fighters, provides effective legal services to consumers in Clearwater, Florida, and throughout the Tampa Bay area who are facing home foreclosure, unmanageable debts, debt collector harassment, or other debt-related problems.