Medical Bill Debt Collection & Credit Questions

Can unpaid medical bills hurt my credit score?
This varies, but in general past due bills are only reported to the credit bureaus once they have gone to an outside debt collection agency (not just the hospital’s internal collections department). Once a delinquent bill is in fact on your credit report, it will likely have a negative effect on your credit rating.

I can’t pay my medical bills and am looking for a solution, but I heard something that medical debts cannot be discharged in bankruptcy because of the changes to the law. Is this true?
No, it is still eligible for discharge in bankruptcy under the new law. The main difference, however, is that qualifying for Chapter 7 Bankruptcy is now a lot more difficult. For personal debt consumers have two bankruptcy options: Chapter 7 and Chapter 13. In a Chapter 7, typically the slate can be wiped completely clean after the debtor liquidates (sells) their non-exempt property. Each state has different laws about what property (and how much) is protected in a Chapter 7, but normally there is a good amount of asset protection, allowing the consumer to become debt free without paying much of a price, except court and attorney fees (and the credit impact of course). Chapter 13, on the other hand requires the debtor to pay off their debts with their disposable income for between three and five years, while still suffering the severe credit score consequences of a bankruptcy (although a Chapter 13 is only reported for seven years, whereas Chapter 7 is reported for ten). With bankruptcy reform, however, consumers who earn more than the median income of the same-sized household in their state may be forced into Chapter 13 if they fail the means test.

I was uninsured and am now stuck with high medical bills after the birth of my child. What debt assistance options are available to me other than bankruptcy?
You have a few ways to get assistance. One is to use a consumer debt settlement company to negotiate your debt down, sometimes by as much as 40 to 60 percent of the outstanding balance. If the account is in collections, this may be a good route to consider because the potential savings can be very high. Consumer Credit Counseling is another avenue to consider. In this type of program it is possible that a payment plan can be arranged between you and the hospital. Although this can be effective you can also attempt to negotiate your bill payments yourself and save on the fees charged by the debt counselor.

Are there really grants for paying off medical bills?
Not that we are aware of. However, if the hospital is non-profit then it is possible you can have the debt forgiven if you show a financial hardship or that you are unable to pay. To see if you’re medical provider is non-profit visit the American Hospital Directory.

I heard that I should read my hospital bill to check for errors. I have tried doing so, but I have no idea what to actually look for. Can you help?
Yes, we can. Here are some of the most frequent ways hospitals will over-bill patients:

  • Charging for services they didn’t actually do – The easiest way to double check this is to compare your medical records with your bill. If you find that you were charged for 10 x-rays when your medical records only show you did three, it is likely you have a case.
  •  Getting billed for services they botched – Let’s say you had a blood test done, and the first one was botched by the hospital, so you needed another one. Why should you pay for both?
  • Being charged for the same thing twice – Ultimately your bills are being put together by human beings, and if they are anything like you and me, it is inevitable that mistakes will occur. Checking out your itemized bill should help you see if this is the case.
  • Billing for services that they assumed happened – When a person breaks their leg, it doesn’t necessarily mean they were give a week’s worth of painkillers to numb the pain. Likewise, a heart attack doesn’t necessarily mean you were in the hospital for three days. Your treatment may have only been for a few hours.
  • Failing to competitively price their procedures and medicine – Perhaps the most common ways that patients pay more than they need or should, this involves paying $10 for a Tylenol tablet, paying for staff that you didn’t need there for your procedure, or paying much more than what is reasonable for your surgery. Check out the average wholesale price in the Medicaid publication for pharmaceuticals and compare the price of your procedure with hospitals in your area.