How to Consolidate Medical Bills

Consolidate medical bills arising from medication, treatment and stays in hospital. The cost of medical assistance has risen sharply in America. According to Harvard Medical School, it was a contributing factor in 62% of all bankruptcies in 2007. This isn't just because people lack insurance and have pre-existing medical conditions, it's because some providers are incorporating clauses to avoid having to pay out.

Ways to Consolidate Medical Bills

If you're seeking a way to deal with past due medical bills, you have a number of options. You don't need to file for bankruptcy to resolve your financial difficulties. The best debt relief solutions include debt settlement programs, debt management plans or a loan to consolidate debt. The optimal choice depends heavily on your circumstances. The last thing you want to do is enter a debt-free solution that exacerbate your problems at a later date.

The Right Way to Consolidate Medical Bills

The debt relief solution you choose to tackle your past due medical bills will be dictated by a number of social factors. These include your credit history, level of indebtedness and disposable income.

Debt Consolidation Loans

Your FICO credit score is the biggest contributing factor with regard to whether consolidating debt with a loan is the best debt-free plan. Individuals with a poor credit history will find that the cost of borrowing is high. They'll also discover that there are few lenders prepared to lend you money.

Prosper loans may be able to offer an unsecured loan for debt consolidation. They are a peer-to-peer lender, which means that people lend money to people. You'll be given a chance to explain why you need to borrow money which may improve your chance of securing finance for your bills. The maximum loan is $25,000, but you'll need a minimum of a fair credit rating.

A homeowner or HELOC loan may mean that you're able to secured a lower rate of interest. The provision of collateral means that larger loans are now a possibility. While this may be helpful when you're consolidating large medical debts, it's important to think carefully before turning unsecured into secured debt. It gives your creditors greater collection powers if you default on the arrangement.

Debt Management Plans

This is the best debt solution for people who have a number of small debts. It won't write-off your debts, but it may mean that interest and further charges are frozen. Under a debt management plan, your credit is repaid at a rate that's affordable to you. It can take a long time to fully clear your debts.

Debt Settlement Program

A professional negotiator will work with creditors to arrange a reduction of up to 50% of the amount owed. You'll then make payment to an intermediary for a period of 12 to 36 months. This is the right debt solution for dealing with large unsecured debts. It's an effective bankruptcy alternative for people who can afford to offer their creditors a payment each month.

There are a number of ways to consolidate medical bills, but it is necessary to invest time and energy into determining the most effective debt solution. Always talk to a qualified debt counselor before proceeding.

Disclaimer: This article in no way attempts to provide legal, financial or tax advice. One should consult a licensed attorney, tax advisor, or other qualified financial professional before proceeding.

Updated: 5 May 2011