The Ins and Outs of Medical Debt Relief

August 15, 2019

From overdue credit card payments to unpaid student loans, personal debt can creep up in many ways. While those two types of debt may be quite familiar to a lot of us, there’s one type that we may forget about entirely.

You guessed it: it’s medical debt.

The United States spends nearly $11,000 on health care per capita, an expenditure which is more than any other developed nation shells out.

Correspondingly, medical debt is a significant source of trouble for millions of American citizens; a 2017 survey conducted by the Urban Institute revealed that it’s one of the most common debts found in collections.

Because serious complications to your health can arise at any time, you’ve got to be sure you know what to do if you can’t keep up with your medical bills. To quickly learn the ins and outs of medical debt and medical debt relief, keep reading.


What exactly is medical debt?

Medical debt is debt people may incur as a result of outstanding medical bills on medications, procedures, or other related healthcare costs.

Like other forms of debt, accruing too much of this type can negatively impact your credit. Often, doctors, hospitals, and other healthcare providers will report unpaid medical bills to a debt collector and not a credit bureau. This means that debt collectors will set up a separate collection account in your credit report that, if not addressed, can cause your credit score to drop as much as 100 points—and fast.

The worst part? This drop may affect your score for up to 7 years after the recorded date of delinquency. Although you can make small improvements to it over time, it’s always better to avoid taking such a blow in the first place.


And what is medical debt relief?

But what if you can’t escape medical debt? That’s why medical debt relief is a thing.

Debt relief is a collective term that refers to different ways of alleviating debts so that the indebted find some financial relief. With medical debt relief, this applies specifically to outstanding medical expenses.

There is no one way to relieve medical debt; rather, there are several. Consider the following 3 options if you, too, need a way to sort out your medical debts:


  1. Negotiations

Although various healthcare providers will work with debt collectors, doing so isn’t the most cost-effective practice. In fact, they’ll lose money that way — that’s why negotiating your debt to a lower balance is one possible course of action that can benefit both you and your medical creditors.

If you’re interested in starting these negotiations, it may be a good idea to do so through a third-party, such as a medical billing advocate.

Additionally, and in ideal circumstances, you’ll want to do this as quickly as possible, meaning before your healthcare provider calls a debt collector; according to, collectors are much less inclined to settle your debt than a doctor or hospital would.


  1. Consolidations

Debt consolidation is another form of medical debt relief that can help lighten the financial burden of unpaid medical bills. This option is a way of paying off several smaller debts into a larger, more consolidated debt that typically includes payoff benefits like a lower interest rate or payment installments.

Common ways to consolidate medical debt is by paying for your medical bills with a credit card or by taking out a loan.

It’s important to note, however, that medical debt pre-consolidation is interest-free. This means that, if you decide debt consolidation is the way to go, you will probably have to start paying interest to creditors offering your newly formed debt.


  1. Qualifications

Depending on your current life circumstances, you may qualify for additional medical debt relief.

For example, low-income individuals may be eligible for Medicaid, which is a government program that helps those who struggle to pay their medical costs.

Additionally, there’s also a chance that medical debt forgiveness can relieve your debt drastically. In this scenario, either your healthcare provider or an outside organization will agree to forgive the cost of your debt entirely. Before having your debt forgiven, you’ll likely need to verify your hardships via some form of documentation.


Are you sure you need medical debt relief?

Medical debt is a serious charge, but one that isn’t always mistake-free.

Before considering any form of medical debt relief, make sure that your bill is free of the following errors:

  • Coding errors – this occurs when human encoding errors in insurance claims or medical bills charge you for more expensive treatments
  • Double billing – this occurs when your healthcare provider has accidentally sent you a bill that you’ve already paid once before
  • Services not rendered – this occurs when your healthcare provider fraudulently charges you for services they did not deliver

Even though recent laws have aimed to minimize the impact of medical debt on your credit scores, you should remain vigilant when checking your medical bills. If you see something you suspect is wrong, always ask questions; it may save you a lot of time and money down the line.


Want to learn even more about other types of debt? Learn more with Illinois Lending. And if you ever need some extra cash to help pay your bills on time, consider applying online for one of our personal loans today.

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