Thursday, November 22, 2012

Consolidating Unpaid Medical Bills

Unpaid medical bills can be a drag. Most of the time, people don't save up for a medical emergency. Part of the reason for this is the thought that bad things only happen to other people. That sense of invulnerability has driven many into bankruptcy because of unpaid medical bills. If you count yourself among these people, don't worry. There are options. Consolidating medical bills is a great place to start.

Consolidation can have its distinct disadvantages and advantages, just like any option. However, it's important that you weigh the pros and cons of consolidation with other alternatives before you proceed. Generally speaking, you should consider consolidating your unpaid bills if you have exhausted all possibilities for charitable funding, such as asking the hospital for discounts, applying for medical assistance programs from the state, or borrowing money from a rich relative at little or no interest.

There are two methods to consolidate your unpaid bills:

First is through a loan from a bank or financing institution. You must remember that this type of loan is secured so you may need to offer collateral-either your house, car or any other asset. One advantage of this route is that it carries a lesser interest rate compared to unsecured loan. Essentially, you're putting your credit history at stake here. Banks, especially now when times are dire, are not wont to offer consolidation to somebody with a credit score below of 600. Consolidation will restructure your unpaid medical bills so you can make lower monthly amortization payments. However, you will pay more in the long run because the process stretches your principal loan in addition to the interest rate that accrues over a longer payment term.

The second way is to seek the help of a debt management company which can bargain with the credit collection agency trying to recover the hospital's money or the hospital itself to reduce the unpaid medical bills to more manageable levels. One advantage of this method is you don't risk your credit history, although you will have to pay the debt management company for its troubles. The service provider should be able to provide you with details, but you should still insist that they report to the credit bureau that your unpaid medical bills are already paid as agreed or paid in full.

When dealing with unpaid bills, the important thing is to never panic. Talk it out with your family, doctor, friends, or even colleagues and solicit suggestions to find out the best option for your situation. Know that you are not in an island by yourself. Millions of Americans are in the same boat as you. While that thought may offer no consolation, it does means there are avenues to settle unpaid medical bills if you just put a little effort into tracking them down.

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