It is amazing how medical bills could pile up so fast you would not know what hit you until you are longing so bad for a medical debt relief to ease out the burden of unpaid medical debts. Expensive but necessary medical costs could come out of nowhere once a sudden illness or disability strikes you or a family member and everything could suddenly go spiralling downward fast. Sadly, it is a scenario that is becoming more common now in most states. Majority of the families already feel the strain of expensive health care costs. There is no denying that many Americans are plagued with insurmountable medical debt and the one that gets the most beating are those with just enough income to support a family, no insurance coverage or have health insurance but with a lot of uncovered medical expenses. Ironically, insurance premium costs jumped to an overwhelming 131% between 1999 and 2009. The recent economic recession just added more weight to the problem. With millions of jobs lost, more and more people are now without or at risk of having no medical health coverage. High premiums forced employers to have their workers shoulder most of the cost of insurance. Worse, all these have become a growing trend in the country.

When the going gets tough, consumers have to be tougher in order to survive amid all medical debts. There are few medical debt relief options available out there that consumers can use, but statistics tells you that most of them chose medical bankruptcy as solution to the crisis. Even if it is a difficult and painful decision to make, many are lured into medical bankruptcy specifically under Chapter 7 because of the idea of a discharging the bulk, if not all of the unpaid medical bills and have a ‘fresh start’. But is it the right choice of medical debt relief? For one thing, it will tarnish your credit score and it will stay on record for 7 to 10 years so there is no escaping the consequences anytime soon. Later on, when you want to acquire a house or car on loan or credit, you will likely be rejected. Future lenders will most likely decline your request for personal loan and future employers will have a negative view on your health conditions because they would not want to hire someone with serious medical history. Also, if you have properties that are non-exempt such as a second house or car under your name, bankruptcy should never be an option if you do not want to lose them for liquidation to pay off your unsecured creditors. Moreover, filers under Chapter 7 who did not pass the means test set by the new bankruptcy law passed in 2005 will have to file under Chapter 13 which equates to 5 year debt payment plan. This is big fail as far medical debt relief is concerned mostly because you end up paying a big portion of your debt plus interest and trustee’s fees from what is left of your disposable income for five years which proves to be very difficult to maintain. In fact, roughly 50% of Chapter 13 bankruptcies end up not being completed.

Medical debt consolidation is another option for those who seek medical debt relief using home equity. Debt consolidation can significantly help with your high interest debts, but this is not a sound option in dealing with medical debts because: 1) you may be paying one simple payment but you are paying with interest that is unnecessary since most hospitals do not charge them anyway; 2) monthly payments could be more than what hospitals are asking for; and 3) you are putting your home at risk unnecessarily. No wonder people prefer to choose medical bankruptcy instead. However, had they known of debt relief programs that offer them the chance at resolving their medical debts that is more forgiving and save their properties from liquidation, fewer filings could have been made. Various debt relief agencies help people with overwhelming unpaid medical bills in a number of ways. They can help in negotiating your debt with the hospital, your physicians, or the collection agency for more lenient terms or help you settle your debt for a portion of the total debt. A good debt relief program could salvage you from going hitting rock bottom and file for medical bankruptcy. Medical debt negotiation, settlement and reduction may be your best choice for medical debt relief. A successful medical debt negotiation and settle could be your chance for lighter monthly payment, clear out your debt in shorter time frame and save your credit score.

When it gets more and more difficult to pay off medical bills, just remember it is never wise to transfer your medical debt balance to a credit card because the high interest rates credit card companies charge will significantly increase your debt. Furthermore, medical debts can lower your gross income making you eligible for Medicaid while credit card balance cannot. Medicaid can also be a part of your medical debt relief which have plans that vary from each state. Their purpose is the same, to help pay off medical bills those financially ruined and really needed a hand. Charitable institutions, churches, non-profit organizations are also there to assist those who badly need assistance with their medical bills. However, they would assist those who are the neediest first, so you’ll never know your chances unless you pay them a visit.

Medical Debt Relief Act

Low credit scores can affect your life in so many ways. It can hinder your plans for buying or refinancing your home, loaning for a car, even your chances for employment. An overdue medical bill sent to a collection agency by the hospital or doctor, and you default a payment, could lower your credit scores. Even if you were able to pay off all your debts, your record will stay the same for the next seven years, at least, under the Fair Credit Reporting Act. Because medical debt presents a special scenario wherein unexpected illness of consumers with an otherwise good credit record becomes delinquent and incapable of paying off medical debts, Medical Debt Relief Act was passed to lessen the impact of medical bills on credit scores. It states that settled medical debts are to be stripped off from the credit record within 30 days and prohibits credit bureaus and organizations from factoring it into the credit scores. While the bill does not provide medical debt relief from current bills, once medical debts are fully paid, it will no longer be a hindrance in securing a good loan or mortgage in the future.