There are some debts which are very sticky. They just don’t harm a person financially, but also emotionally; especially when one isn’t healthy, and has a mountain of debt to cover. It is very difficult situation, but one has to come out of it in any case. Unpaid medical bills and credit report have a normal relation. If you pay the debt, your credit report gets better, if you don’t, it gets worse. Also, credit score goes down very easily.
Bankruptcy or Debt?
A debt stays in your credit report for 7 years, while bankruptcy appears for 10 years. It may be easier to declare bankruptcy, but the chances of improving one’s condition after bankruptcy are much lesser than the chances when one has a debt. The lenders and all are particularly harsh to those with a bankruptcy in history. Also, a bad credit may be appear in credit history for 7 years, but generally, only the recent history is looked upon, and in more cases then not, is enough to trust a person as creditable. While bankruptcy makes you wait for 10 years for the same.
Don’t Transfer it to a Credit Card
It is a huge mistake to transfer the debt to one’s credit card. The reason being, the interest rate of credit card companies is much higher than those of medical agencies. Far from being a good solution, it isn’t even a solution, and mostly harms. Also, there is some leniency possible in case of unsettled medical bills and credit report may not suffer that much, time given may be higher. But in credit card, it isn’t the case.
Medicaid Coverage
It is better to go to state authorities or state’s health office. Enquire about Medicaid coverage, and eligibility. It is easy to get Medicaid coverage for some of the debt, and sometimes, all the debt is covered under that. Even in case there is a court summons from the collection agency, it is advisable to settle the matter with the original lender, as the agencies may fake the real summons, and/or, try and increase the time, by taking in the installments, and not reporting it.
It is always better to be cautious as one mistake can create problems for as long as 10 years. Counseling is often helpful in such cases.