How to Recover Financially When You Get Into Medical Debt

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recover financially when you get into medical debtIn 2016, a study conducted that 1 in 5 working age Americans with health insurance still struggled with paying their medical bills. Medical debt has also been cited as the #1 reason for people declaring bankruptcy in the United States. So how are you supposed to recover financially when you get into medical debt?

How to Recover Financially When You Get Into Medical Debt

This post has been written by our staff writer, Kimberly Studdard.

It happens to almost all of us. We’re be-bopping along through life, everything is going just fine and then BOOM, you slip on a sheet of ice and break your arm. Or maybe your kid gets sick with the flu and has to spend the night in the ER. Or heck, maybe you or your spouse are diagnosed with cancer… Stuff like this happens, and it leads to medical debt.

So what can you do about it? Let’s check out your options.

FMLA

While FMLA (Family and Medical Leave Act) won’t help you pay off your bills directly, it can help keep you from losing your job. This act is federal law, so no matter what state you are in, you may qualify for up to 12 weeks of unpaid leave.

The great thing about FMLA is that it gives you the time to recover from any serious medical misfortune. No one wants to come back to an empty desk when they just left the hospital. FMLA can help ensure that you’re able to get back on track with work, and your paycheck, which will help as you start to recover financially when you get into medical debt.

File For Disability

While disability varies from state to state, it can really help you recover financially when you get into medical debt…especially if you plan on being out of work for at least 12 months. While it’s never fun to lose money (or a steady paycheck), disability can help ease a bit of your burden.

There are requirements to receive disability, but if you qualify, you’ll start receiving money that can then go towards bills, necessities, and even your medical debt.

Talk To The Hospital or Doctor

Did you know that many hospitals and doctors will give you a discount just by talking to them? While it may seem odd, to them, some money is better than no money at all. When you try to recover financially when you get into medical debt, talking to the hospital or doctor who gave you the bill should be a top priority.

If your debt has gone to a collection agency, don’t fret. Make sure you have the paperwork for the debt, as well as why and how it was sent to the collection agency, and talk to them about making a deal too. Collection agencies get your debt for pennies on the dollar, and you can use that to your advantage!

This method works really well when you have all of your paperwork together, including the bills you owe, recent pay stubs (for eligibility purposes), and your insurance information (or not if you self-pay). Just tell them what you can afford to pay, and many will be willing to work with you.

Set Payments

If you’ve been able to reach an agreement with your hospital or doctor about lowering your debt, but can’t pay all of it in full, ask to set up payments. Just like they were willing to work with you on lowering your bills, they may be willing to have you pay in monthly installments as well. This is a great way to recover financially when you get into medical debt, because it’s a lot easier for many people to pay a monthly bill that’s $100/month vs. paying $5,000+ up front.

If you plan on making payments to your doctor or hospital, make sure you’re always getting a new bill and receipts that reflect your payments. It’s always important to cover your tail in case someone on the other end makes a mistake (which billing departments are notorious for!)

Get Assistance

If you still need help to recover financially when you get into medical debt, you can always try getting assistance in other ways. I wouldn’t recommend trying out websites like Go Fund Me or the like, because there is no guarantee that you’ll ever receive monetary help. But you could try applying for Medicaid, applying for assistance with medical assistance programs, or even state sponsored programs. These programs were implemented to help you with medical financial burdens, and can be a great way to keep your wallet a little fuller.

While it’s not easy to recover financially when you get into medical debt, it is possible. With these tips, you’ll be able to negotiate and lower your bills and avoid situations like declaring bankruptcy.

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2 comments to How to Recover Financially When You Get Into Medical Debt

  • Jamica

    These are all viable tips and suggestions- but they absolutely DO NOT work in most serious medical debt situations… As my husband and I learned the hard way! Upon his cancer diagnosis, we lost over 2/3 of our income (his) and though he eventually was awarded SSD (Disability) it took over a year and a half to receive it. In the interim, our “3-6 month emergency fund” was depleted, even though we immediately jumped into action and pared down our household budget to the bare minimum and took steps to stretch those dollars to the max. (This included moving to a smaller, cheaper apartment, cutting every expense we could, and on and on and on…) We are not homeless yet and have managed to keep the utilities paid, but we are looking at $70K+ in unpaid medical debt, a couple credit cards we used to keep a roof over our heads when the emergency fund and my 401K money ran out, and here’s the kicker: this cancer will NEVER go away. He is in remission (thank God) but the yearly battery of costly tests, monthly oncology visits, ongoing life-long chemo, and side effects guarantee we will meet our high deductible and OPX every year for the rest of his life. Our attorney looked at the situation and told us our only course of action is bankruptcy- unless we become CANADIAN. And chances are, this won’t be our last bankruptcy.

    • Hi Jamica – Your situation sucks. I agree. But please don’t take financial advice from an attorney. There’s always an open door or window. You’ve just got to constantly ask the question, “How can we?” and they will present themselves. I’m a firm believer in that.

      If you want to chat or want more advice, contact me via email: derek [at] lifeandmyfinances.com.

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