Matt Couch

Runaway Medical Debts - How to Bring Your Finances Back Under Control

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You may find it difficult to understand how medical problems can be considered as a cause or reason for bankruptcy. Doctors are very particular about payment of fees, aren't they? In such a scenario, unless you try to cheat the medical service provider by getting the treatment done without paying any money, where is the question of medical debt coming into existence?

Well, if you are getting an expensive medical procedure done, you certainly won't be required to deposit the entire amount in full up front. Medical institutions often provide installment facility. Of course, the entire amount must be paid when the patient is being discharged. However, if the sole income earner of the family is undergoing the medical procedure, then

- the monthly income of the family will dry up, and 
- savings will be directed towards post-operative care 
This often causes the hospital bills to remain pending.

Of course, hospitals are not very lenient in this regard. They are very quick to take legal action for amounts as small as $100. In such a scenario, most people opt for bankruptcy as it will help them get rid of the medical debt. Further, the liquidation of the assets and repayment of the debt, at least in part, makes the people feel good. They feel happy that they have made at least a partial repayment.

On the other hand, debt settlement seems immoral because it involves getting a 50 to 70 % discount from the lender- in this case the hospital or the medical service provider.

When you opt for bankruptcy, your assets shall be liquidated and the same is utilized to repay your liabilities. The overall amount usually is enough only to repay around ten cents for every dollar owe by the creditor. Even if you secure a 70% waiver from your creditor, you will be paying the balance 30% over a period of twenty four to thirty six months. Hence, if you opt for debt settlement instead of a bankruptcy, you are actually doing a favor to your creditors.

Further, many hospitals and service provider pass on the debt to debt collection agencies. This is done to escape the logistic and administrative problems involved in collection of debt.

Since collection agencies purchase debt at a very low price, even a thirty percent settlement is profitable. On the other hand, they gain very little if you opt for bankruptcy. Considering all this, it is advisable to going for settlement even if the debt owed is towards a medical institution and not a credit card issuer.

If you are over $10k in unsecured debt it would be financially prudent for you to consider a debt settlement. There are organizations that exist called "Free Debt Relief Networks" that are a great place to start in locating legitimate debt settlement companies in your region. They provide free debt help and know where to locate the top performing debt settlement firms. To get free debt help check out the link below:

Article Tags: Debt Settlement

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