Medical Debt Negotiation

Medical debt can present a huge challenge to many families.  If someone in your family had an unexpected medical emergency, you may be faced with a mountain of medical debt – even if you have health insurance.  Dealing with this medical debt presents you with a unique situation.  Because medical debt-holders (i.e. doctors and hospitals) are unsecured creditors (i.e. they don’t have control over any of your assets), you might find negotiation to be a little easier.

Transparency is Key, However

But, it’s important to note that transparency is key.  Because you’re dealing with unsecured creditors, you’re going to have to show these creditors an honest depiction of your financial state of affairs.  Full transparency means revealing personal information: your bank statements, pay stubs, credit card bills, etc.

While this might sound overwhelming and a bit intrusive, it’s important to remember that this transparency works in your favor.  Full transparency can reveal your financial situation as it actually is to your creditor.  The hospital will realize how desperate your financial situation is, and that it’s better to receive half of what they’re owed than nothing at all.

If your creditor is unwilling to work with you, you can always file for bankruptcy.  Through the bankruptcy process you will be able to discharge all of your medical debt and most all of your other debts.  Many people who are in medical debt are finding much-needed relief in the bankruptcy process.