What to Do When You Have Too Much Medical Debt

If you are suffering from crushing medical debt—something that is all too common—try talking directly to your provider to get your bills under control.

Recent reports that one-third of GoFundme’s campaigns are dedicated to medical expenses are a reminder that America’s medical debt problem is only getting worse. But if you’re struggling with medical debt, you certainly didn’t need any reminder. You probably can’t go more than a day or two without thinking about it.

There’s lots of talk about what the future of the American medical system could look like, but whatever it is, that won’t make a difference to you if you have too much medical debt right at this moment. That’s why we spoke to the experts to find out what you should do when you’re dealing with too much medical debt (other than start a GoFundMe campaign).

Talk to your provider.

As is the case with many debts, talking won’t always help, but it likely won’t hurt either. Generally, anyone who is owed a debt would rather get a portion of that debt than none. Unless you’re dealing with an unbelievably spiteful collections agency, their ultimate goal isn’t too hurt you. It’s too recoup as much of the money you owe them as they’re able to. Which is why they might be more open to discussion than you might originally assume.

“Call your providers,” recommended Holly Wolf, Director of Customer Engagement for SOLO Laboratories (@SOLO_labs). “Your providers have no idea of your financial situation until you tell them about it. Many will offer a sliding scale or payment plans. The key is being HONEST about what you can afford. Call for every bill and every service.”

Financial Lifeguard Christine Luken (@FinLifeGrd) shared her own personal example of how reaching out to your medical provider about your financial difficulties can be worthwhile: “See if you qualify for income-based assistance. When my mother-in-law was going through her bladder cancer treatments, she only had social security income. The hospital granted her an almost 90% reduction in her medical bills because of her low income.”

Just be aware that you might have to provide some documentation to back up your case.

“When someone has substantial medical debt, I recommend seeing what programs the doctor or the hospital have for helping with balances,” bankruptcy attorney Ashley F. Morgan (@AFM_Law) told us. “Sometimes the medical groups have programs for donations or will reduce your fees due to your income (or even due to really high balances). This often will require submitting income and financial statements to show a substantial hardship.

“The next option is often a payment plan. A medical facility may allow you to pay off debts over months or years, depending on the circumstances. If you have substantial other debts, this option may only provide minimal relief. If neither of those two options will help, then I recommend considering bankruptcy.”

But as you’re probably aware, bankruptcy isn’t exactly a lucky “get out of debt free” card.

File for bankruptcy.

As is the case with most (but not all) kinds of debt, one way to handle your medical debt is by declaring bankruptcy. But it’s not an option that should be taken lightly.

“Bankruptcy should never be your first option, but with substantial debts, it may be your best option,” advised Morgan. “A Chapter 7 bankruptcy would help you wipe away the medical debt and a Chapter 13 would allow you to restructure payments to all creditors over the course of 3 to 5 years. Chapter 13 payments are based on many factors including income and assets.

“If you are considering bankruptcy and have substantial medical debt, then it is important to try and time your bankruptcy filing for after your medical treatment is stable. If you file bankruptcy and then need more medical treatments, you may find yourself in more debt and the bankruptcy was for not. This is often the most complicated factor for individuals who need on-going medical help.”

But of course, the best way to handle having too much medical debt is to minimize what you rack up in the first place.

Preventative medicine.

While the following advice may not be very helpful for your current debt, it could help you limit additional medical debt in the future.

“Be your own medical debt advocate,” suggested Wolf. “Many people shy away from revealing their situation. When my husband and I BOTH had $16K deductibles, I always said ‘We’re paying out of pocket, what can we do to reduce our expense?’ It’s amazing how people worked with us to find the lowest cost MRI. They offered HUGE discounts. A $1,200 procedure cost us $400 in cash just for asking. Call around and compare drug prices.”

And that’s not the only question Wolf recommends asking: “Ask the questions ‘What will we learn from that test/procedure?’ ‘ What’s the worst that will happen if I don’t take this medicine?’ ‘What would you do if you were guaranteed not to be sued?’ I know someone who got the answer ‘I wouldn’t recommend chemotherapy.’ Three doctors recommended it for fear of being sued. But when the option of being sued was removed, the answer changed because they said chemo wasn’t going to improve the outcome.”

Finally, Wolf reminds you to: “Take personal responsibility for your health. Are you doing all the things you can to improve your health? If you’ve got COPD and are still smoking—that doesn’t make sense. Have heart issues? Are you watching your diet and getting some exercise? As a gastroenterologist told me, ‘I’d lose 70 percent of my business if patients just made the lifestyle changes I recommend.’ He said maybe five percent actually make the changes.”

Unfortunately, illness is part of the mortal condition, so you can’t just hope for perfect health forever. But with these tips, you can hopefully keep medical debt from taking over your life.

Too much debt of any sort can tank your credit score and drain your savings, leaving you with limited options in a financial emergency. This is why people end up relying on bad credit loans, which can be a fine way to go if you choose the right lender. (Hint, look for a safe, affordable installment loan.) But many other folks end up getting saddled with predatory no credit check loans like cash advances, payday loans, and title loans. Don’t let debt bury your financial future. Learn more about handling your debts responsibly with these related posts and articles from OppLoans:

Have you had to dig yourself out from underneath a pile of medical debt? We want to hear from you! You can find us on Facebook and Twitter.

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Christine Luken (@FinLifeGrd) is a Certified Financial Coach, speaker, and author of Money is Emotional: Prevent Your Heart from Hijacking Your Wallet.  She’s an active member of the Financial Therapy Association, and the Northern Kentucky Chamber of Commerce.
Ashley F. Morgan (@AFM_Law) is licensed to practice law in the Commonwealth of Virginia. She is also authorized and admitted to practice law in the United States District Court and the United States Bankruptcy Court for the Eastern District of Virginia. She has dedicated the majority of her legal career helping clients file Chapter 7, 11, and 13 in the Eastern District of Virginia. Ashley works with both individual and business debtors to find the best solution to their debt problems. She is regularly in bankruptcy court in Alexandria, VA or attending 341s with our clients.
Holly Wolf is an executive with over 30 years experience in banking and healthcare.


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