When people are in debt, one of the main options they tend to look at is debt consolidation. There are times when debt consolidation can be an excellent choice, but it’s not always the right solution.
Consolidating medical debt may seem like a good way to reduce your payments and help you stay on track with paying them back, but by consolidating, you may lose some of the options you had before. For example, if you take out a loan and consolidate your debt, you may no longer be able to use support programs through the hospital or ask for debt forgiveness through the hospital’s programs.
Debt consolidation could make your medical care cost more
It’s also important to consider how debt consolidation could end up costing you more by stretching out the length of time it takes to pay the debt and adding interest to the equation. Many medical bills do not accrue interest, so if you can keep them in-house at the hospital, that may be a better choice.
Alternatives may be a better choice to eliminate medical debt
It may be better to eliminate medical debt by negotiating with the hospital to reduce what you owe, to work with an agency that offers credit counseling to negotiate down what you owe and lower interest rates or to enter or by entering into bankruptcy, like Chapter 7 or 13. Bankruptcy, usually, is a last resort, but it can be a great choice if you don’t see any way of paying off the amount you owe or need support to pay off your debt in less time.
Bankruptcy may help you eliminate medical debt quickly
If you opt for a Chapter 7 bankruptcy and qualify, you may be able to eliminate all of your medical debt quickly. Doing this may help you avoid having to pay back large sums to the hospital and may help you get back on track financially.
Many people who accrue medical debt do so because they’re ill or have been injured. If your debt is overwhelming and you cannot repay it, then bankruptcy could be the right choice to help you move forward without as much focus on your finances.
