While a number of people consider debt to be related only with credit cards, student loans, auto loans, or mortgages, it is crucial that you understand that medical debt is also one of the huge reasons as to why numerous people are in debt. Most of the people are unable to clear their medical bills. Another issue with people who do not or cannot pay the medical bills is that they get various other kinds of credit, which is also going to become an issue with time. According to www.lendedu.com, more than a quarter of the US citizens who are between 18 and 64 cannot pay the medical bills.
Radiologists, offices of the doctors, hospitals, and the medical labs are known to have huge varieties of options, especially when they are looking forward to receiving the payments. Numerous medical bills, which are unpaid, are responsible for landing up in the collections.
Medical debt collection
If your medical debt is going to the collections, you are going to receive calls either in your home or when you are in your office, from the collection agencies. You can also observe that the collection companies are taking out garnishment against the paycheck or sue you for a particular judgment.
In case if you are sued, you are going to end up getting a dark mark on the credit score as well as the credit report, which is going to be a huge obstacle, if you require credit in the future. It is going to be extremely stressful when the debt collectors keep contacting you. Therefore, you need to look for solutions, which are going to help you with your medical debts.
Medical debt consolidation
Most people have the knowledge that debt consolidation is basically a personal loan or the credit card loan, which can be used for clearing their debts. However, when you have medical debt, it is not going to be simple at all. Medical bills do not accrue interest, and hence making use of loans, credit cards, or other credit products for consolidating them is going to cost a lot of money in the future. With a new credit card, you are going to end up paying high rates of interest, whereas, with the personal loans, you are going to end up paying money almost immediately.
Credit counseling- An important step associated with the process of consolidation of medical debts is seeing the credit counselors. The credit counseling organizations are responsible for offering a plan as to how the debt can be structured, how budgets can be expensed properly, and how you can work towards financial health.
When you are choosing an organization for credit counseling, it is recommended that you check with the office of the attorney general of your state and understand the laws of consumer protection, in order to know if the organization is reputed. These organizations will also help in pointing out the complaints that credit counseling organizations might have received. This is going to ensure that you select honest credit counseling companies and that you are not being cheated in any manner.
How is debt consolidation going to work?
One important option, which you are going to have with the credit counseling agencies, is the debt consolidation plans. Your counselor and you are going to end up devising a proper plan for clearing the bills. However, as opposed to paying money to the creditors, you will be paying this money to the debt management organization.
The credit counselor is going to be responsible for paying all the medical bills in accordance with the plan that has been designed by him. This means that you are not going to get any more nasty calls from the creditors. However, you also need to understand that the debt management plans are not considered to be quick fixes. Depending on the total amount of money that you owe to the hospitals for the office of your doctor, this plan can be going on for almost four years or even more.
For setting up an ideal plan of debt management, you have to ensure that you are completely honest with the counselor about the total money that you owe and the total number of creditors to whom you owe. Also, you need to inform the total amount of money that you are capable of paying. The counselor will take up the responsibility of contacting the creditors and as soon as the creditors discover that you are taking steps, in order to clear all your debt, there is a chance that they are going to waive a certain amount and lower the total balance that you owe to them.
It is also crucial that you understand that a debt management plan might not be ideal for each and every customer. If the medical bills that you have are almost more than 50% of the annual income, you can consider the consolidation loans as well. You can take help from Nationaldebtrelief as well.
Consolidating your medical bills
Consolidation loans, which are designed to provide assistance with the medical bills, are going to ensure that you pay a certain rate of interest on the interest-free debt; however, it is going to be negatively impacted on the credit score. Numerous lenders have loans that have been designed for consolidation only. Some are also responsible for offering a low rate of interest in comparison to the others.
You can select organizations that are responsible for consolidating the medical bills as well as other kinds of debt that you have. You can also consult your local bank if you are interested in consolidating your medical debt.
Medical debts can be extremely stressful especially if you are not trying to clear them within the designated time period. However, in case if you are unable to clear your medical debts because of a number of personal problems, it is always a good idea to opt for medical debt consolidation.