Medical debt is one of the biggest problems facing Americans considering bankruptcy and those who have already exited bankruptcy. Because of the current structure of the healthcare system, it seems that even if a debtor has health insurance, some type of medical debt problem is inevitable. below are a few tips on how post-bankruptcy debtors can handle it and avoid a second bankruptcy:
Avoid Credit Cards
Whatever you do, do not charge post-bankruptcy medical debt to your credit card. Medical expenses are interest free; but when you charge that debt to a credit card, interest is charged. If you're not careful, it's the credit card debt that will drive you into a second bankruptcy filing.
Work Out a Payment Plan
Most hospitals and clinics are willing to offer reasonable payment plans to debtors. If you have accrued a significant amount of medical debt after bankruptcy, don't be afraid to ask for a payment plan. even if it takes a few months to pay off a bill, this will not show up on your credit report, which is a good thing for your post-bankruptcy finances.
Avoid Collections
Do not ignore medical bills after bankruptcy. Ignoring medical bills will send those debts on the fast-track to collections. Once the debt makes it to collections, the harassing phone calls and letters will begin. and if after so many months you fail to pay the debt it may be sent to a third party bill collector.
Credit Score Impact
Generally speaking, medical debt does not impact your credit score. For post-bankruptcy debtors with medical debt, a negative credit score impact is unlikely. however, if it is sent to a third party bill collector, that collections agency may decide to report the debt to the credit reporting agencies. how they report that debt is regulated by HIPPA, they cannot reveal any protected information about your medical status. the important thing to remember is that once that medical debt is on your credit report it can do damage to all the hard work you did during bankruptcy. the good news is that once you pay it off, it can significantly improve your credit score.
Know Your Policy
When buying health insurance after bankruptcy, know and understand the terms and conditions of your policy. how much does the insurance company pay? What are your co-pays? is there an out-of-pocket annual limit? Understanding the terms and conditions of your medical policy can help you avoid medical debt and help you avoid a second bankruptcy filing because of that debt.
Post-Bankruptcy Survival: Tackling Medical Debt
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