If you are struggling with paying off your unpaid medical bills and are trying to determine what consequences it can have, this guide is for you. The financial strain of healthcare is stressful for you and anyone unable to pay his medical bills. But what happens if you don’t pay your medical bills?
In this blog, we will find out the answer to your question. Moreover, we will share a few tips with you about how you can reduce your medical bill debt.
So let’s start:
What Happens If You Don’t Pay Medical Bills?
According to a survey held in February 2020, almost 32% of employed Americans have medical debt, and the more exciting thing is that more than half of them have defaulted on it.
If you cannot pay your medical bills on time, it will lead to the same issues as with any other unpaid. Here’s the order of what will likely happen:
1- Phone Calls & Reminder Emails:
The first step typically involves the doctor’s office sending reminder emails and making phone calls to inform you about the unpaid bill. These communications serve as initial attempts to bring your attention to the outstanding invoices so that you can pay them soon to prevent yourself from getting into trouble.
2- Additional Charges:
If you don’t pay the bills after the initial reminders and phone calls, the doctor’s office may add additional charges to the payable account. These charges generally include late fees or interest, increasing the total amount you owe.
3- Forwarding of Matter to The Collection Agency:
The healthcare provider will transfer your account to a collection agency if the debt remains unpaid even after additional charges are added. The collection agency is a third-party organization that specializes in recovering debts. Once your account gets transferred, the collection agency will take care of the matter on behalf of the healthcare provider.
4- Letter Mails & Phone Calls:
Once the debt is in the hands of a collection agency, they will start their efforts for payment recovery. This involves sending letter mails and making frequent phone calls to communicate the urgency of the unpaid debt and to request payment. The collection agency may offer you settlement options or payment plans.
5- Legal Action:
If all previous attempts to collect the medical bill debt fail, the collections agency or healthcare provider will decide to take legal action to recover the outstanding amount. This involves filing a lawsuit against you to obtain a judgment for the debt owed. If successful, they may be granted the right to garnish your wages, meaning a portion of your income will be withheld to repay the debt.
Tips for Reducing Your Medical Bill Debt
1- Negotiate To Get Your Medical Bill Debt Reduced
If you have a medical bill debt, consider contacting your provider to negotiate the amount of debt. You can negotiate with the hospital or doctor’s office in various ways to achieve favorable outcomes. Here are three of them:
Request a Discount for Instant Pay:
If you can instantly pay off your medical bill, discuss with your provider the possibility of receiving a discount. This straightforward request can potentially significantly reduce the total amount you owe to your provider.
Let Them Know Your financial constraints:
If you are not in a position to fully pay off your medical bills, then have an open conversation with the hospital or doctor’s office about it. Explain that you require a discount or financial assistance to pay your medical bills. They may ask you for financial documentation, such as tax returns, to assess your situation.
Ask Them for A Payment Plan:
If you are good at negotiation, you can ask the doctor’s office for a manageable payment plan. If the doctor’s office does not agree to forgive your medical bill, then explore the option of a manageable payment plan with low or no interest.
2- Make Use of Your Home Equity
If you are serious about paying off your medical debt, consider using the equity in your home to alleviate the debt burden as a last resort. Using your home equity loan or line of credit (HELOC) is a feasible solution for managing your medical bill debt.
3- Take A Personal Loan
Another option that you can go for to reduce your medical debt is getting a personal loan. This debt-consolidating strategy will help you with the repayment process and avoid the hassle of handling multiple bills and communications from hospitals, doctors, and collection agencies. Remember that your loan’s interest rate should be less than the medical debt interest rate.
Frequently Asked Questions (FAQs)
Can unpaid medical bills lead to the debt collector contacting me?
Yes, if your unpaid medical bills are sent to collections, the debt collector may contact you to collect the receivable amount on behalf of the healthcare provider. He can get you to collect receivables, but you still have consumer protection rights under the Fair Debt Collection Practices Act.
Can medical bills be negotiated or settled for a lower amount?
Yes, medical bills can sometimes be negotiated or settled for a lower amount. You must contact your healthcare provider to discuss your financial situation and explore options.
Can healthcare providers take legal action against me for unpaid medical bills?
Yes, healthcare providers have the right to take legal action against you to collect payment of unpaid medical bills. They can sue you in court and obtain a judgment against you.
