Medical Debt and Bankruptcy – Comparing Options for Medical Debt Relief

A severe health crisis can rapidly place an individual or family in a dire financial situation that threatens the very foundations of life, not only for the one in medical need, but also for those closely attached to them. Out of control healthcare expenses are one of the leading causes of bankruptcy in the U.S. However, comparing alternative options for medical debt relief before making a choice is not only wise, but necessary to a family’s financial health.

Bankruptcy is heralded as a quick means of obtaining quick medical debt relief. However, it also carries with it significant consequences which are long lasting and can easily leave you in just as bad a financial situation.

Bankruptcy will instantly drop your credit score by 200 to 250 points and make it impossible to get a low-interest loan for the 10 year period that it remains on your credit report. It also creates a huge risk of losing any property owned as future creditors will be forced to sue, causing liquidation to satisfy financial needs after the bankruptcy is finalized.
There is also the option of seeking debt consolidation. This provides some relief as all the monies expended for numerous bills will be condensed into one monthly payment. It will also save on interest and various fees. However, the debts themselves are not reduced through medical debt consolidation, so the amounts owed, which are causing the financial crisis, remain intact and in need of payment.

The best option when considering fast relief from the burden of high medical debt is through debt settlement with the various creditors. Debt settlement seeks to negotiate a reduction in the amount owed, usually under the agreement that the reduced medical debt is paid immediately, or is paid in a very short period of time. Thousands of dollars can be eliminated through this process.

Contacting a debt settlement company to handle your situation is a smart move. These companies are highly skilled and knowledgeable of law and medical policy and can often get debt settlements of pennies on the dollar, giving you the medical debt relief you need.