If you have to consolidate medical bills, you need to do it immediately. The cause of this debt is stressful enough. If you let the debt get out of control, that can make things a lot worse for you.
When there is a medical emergency, you cannot ignore it just because you do not have money. In most cases, you will find a way to finance the expense. After all, if it can save a life, the expense should not be an issue. You need to do your best because once a life is lost, it cannot be taken back. As for money, it can be earned.
This is the mentality that can lead a lot of people into debt.
If you think about it, there is nothing wrong with that. You will do everything that you can to ensure the welfare of a loved one. But despite the good intentions of your debt, the fact remains that you need to pay it back. And when it comes to medical debt, you need to act on it as soon as possible. Fortunately for you, there is an option to consolidate medical bills to make debt payments easier to keep up with.
Why you need to deal with medical debt immediately
There are two important reasons why you need to take care of your medical bills as soon as you can.
It is reflected in your credit report
First of all, this debt is also reflected in your credit report. So if you fail to pay it off, it can pull your credit score down. According to research, 1 in 6 Americans have at least one medical bill on their credit history that is past its due. The thing is, unpaid medical bills are treated differently because healthcare professionals and institutions do not report it to credit bureaus. It is only reported once it is turned over to a debt collection agency. That means you have more time to work on it before it reaches your credit report. If you do not want it negatively affecting your credit score, you need to consolidate medical bills immediately.
It can lead you to bankruptcy
Another reason to work on your medical debt is that it can lead you to bankruptcy. Statistics reveal that more than 6 out of 10 bankruptcies were related to medical debt. Apparently, people are unable to pay off their dues because they are either unable to work or the cost of health care is too high. While filing for bankruptcy is not the end of the world, it can be hard to get up from this financial situation. So if you can deal with your medical bills while it is still low, you might want to keep it from accumulating. If you wait to pay it off, it can really destroy your financial future.
How to consolidate medical bills effectively
Now that you understand why you need to consolidate medical bills as soon as you can, let us discuss how you can do it effectively. It is important to remember that consolidating multiple debts is not just about combining your bills. You have to implement it correctly so you can improve your financial position as you make your way towards debt freedom.
Here are some tips that will help make medical debt consolidation easier and more effective.
Check if your medical debt has interest
First of all, you have to inquire if your medical debt has an interest. In most cases, medical debt does not accrue interest. At least, if it is still with the healthcare providers. They will not charge you with interest. The only time that it will be charged with interest is when you borrowed money to pay it off, used credit cards or if it is already given to a collection agency. But if it is not accruing interest, then it does not make sense to consolidate medical bills.
Study your medical bills
You should also take a close look at every detail on your medical bills. Look for errors or entries that should not be there. Sometimes, medical bills have errors. You are either charged for treatments or services that were not done to you. Or maybe the number of medicines were more than what was really used. You have to look into this so you are sure that you are only paying for what you really received.
This is also a great time for you to check for treatments and services that should be covered by your insurance – if you have one. Dispute any errors if you find any.
Negotiate for a debt reduction
Before you consolidate medical bills, try to negotiate for a debt reduction first. If your illness keeps you from working, that is a valid reason that can be brought to the attention of your healthcare providers. They need to understand that your financial situation makes it impossible to pay back what you owe. While you are not asking them to get rid of the whole debt, you want to ask them to reduce the overall amount that you owe. Usually, healthcare costs are inflated. That means there is enough room to negotiate.
See if you can borrow from family or friends
You can also check if you can get financial assistance from your family or friends. But if you have to borrow from them, ask if they can lend you without interest. If you can consolidate medical bills without paying interest, that will really help you save money.
Do not use your credit cards
It is usually a bad idea to use credit cards to pay off medical bills. If your bills are not accruing interest, why will you consolidate medical bills using the high-interest credit cards? It is best to stay away from more credit card debt because that will cost you more. You might be better off asking for a reduction of what you owe.
Use a low-interest loan
If you have to borrow money to consolidate medical bills, you should make sure that you will only consider a low-interest loan. The lower the interest, the more you will save on the overall cost of your medical debts. If you have collateral, you can probably opt to use that to get a secured loan. If anything, the fear of losing the collateral can encourage you to pay off the loan regularly.