I cannot afford my medical bills. What are my options to manage this debt?

Medical bills are a staggering problem throughout the country. A recent project by the Kaiser Family Foundation (KFF), a non-profit organization that focuses on national health issues, dug into medical debt in our country and found that 41% of adults have some kind of medical debt. This debt is often very large. The project also found approximately 1 in 8 of these adults owe $10,000 or more.

This is not the first project of its kind. Unfortunately, this problem is not a new one. The Consumer Financial Protection Bureau investigated the same issue and found that almost 60% of the debts that were in collection in 2021 were related to medical bills.

We know that medical debt is a big deal and we have had time to review the broader impact. Some additional negative effects triggered by this debt include:

• Unmanageable work hours. Some are taking on extra shifts and second jobs to try to earn enough money to pay the bills.
• Delay retirement. People are pulling retirement funds to try to pay off these bills, pushing back their estimated retirement dates.
• Credit card debt. Some are relying on credit cards to pay medical bills. The high interest rate of the credit card then compounds this debt, vastly increasing an already large bill.
• Rise in harassment. Hospitals can sell some of this debt to third-party debt collection companies. These companies then have collectors call at all hours of the day, sometimes in violation of federal laws, in an attempt to get payment.
• Access to care. Ironically, medical debt is also serving as a hurdle to patients who need medical care. Unable to pay their soaring bills, some hospitals and physicians turn patients away pointing to these mounting debts as the reason.

If you are struggling with medical debt, it is important to recognize that you are not alone. There are options that can help you manage medical debt.

What are my options when it comes to medical debt?

The first step is often to reach out to the provider and see if you can negotiate a more manageable bill. In some cases, there is some flexibility here, but not always. Your rates of success with this method are generally higher if you contact the provider sooner rather than later, so prompt action is recommended.

Next, avoid using credit cards or retirement savings to pay off these bills. As noted above, credit cards often have high interest rates, meaning the amount owed can grow and add a significant amount to the bill you already owe. It is also best to avoid using retirement savings. There are rules for these accounts and removing funds early can result in a penalty — reducing the money you saved to serve you during retirement. Using either credit cards or retirement to pay off medical debt basically turns medical debt into even more debt.

The next option to consider is bankruptcy. With the numbers noted above, it is no surprise that medical debt is one of the top reasons people file for relief through bankruptcy. Hundreds of thousands of Americans file for bankruptcy every year citing medical debt as the reason for the filing.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. An attorney experienced in the interplay between bankruptcy and medical debt can review your situation and discuss your options.