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Medical debt is financially and emotionally tasking; more so than most other types of debt, but there are ways to manage it before it gets out of hand. All you need is the right attitude and the relevant information to work your way right through it.
Medical debt almost always follows an unexpected injury or illness, and bills can be overwhelming when you’re trying to focus on your health. Even if you have health insurance, a brief stay in a hospital can leave you with large and burdensome bills. Chronic or serious health conditions can wipe out your savings swiftly and put you in debt for years to come.
In addition, legal complications resulting from medical debt can severely the financial well-being of your family. Medical debt is fast becoming one of the leading causes of consumer.
But if you’re in medical debt, you’re far from alone. One study found 40 percent of American adults have had problems repaying medical debts.
Dealing with Medical bills
When tackling medical debts, you may have to deal not only with doctors and hospitals, but also with your health insurance company and even an army of debt collectors. Some medical establishments are quite aggressive about collecting debts and may even sue you or try to convince you that you can’t seek further medical treatment if you owe them money.
When you receive your bill, you must first make sure it’s accurate. Look for overcharges, or charges for care and services you didn’t receive. If you find any errors, contact the billing office to have them fixed promptly.
Remember that your bill may be negotiable. Speak with your services to try to work out a lower total; your provider may be able to cut fees, for example.
You can also try to work out a payment plan with your doctor or hospital. In a way, you’ll be agreeing to make on an unsecured debt just like credit card debt. You’ll be responsible for monthly payments of a certain amount, and you may be charged predetermined fees of interest.
How can medical bills damage your credit?
Many patients don’t realize how easy it is fir a medical bill to damage their credit. They don’t understand that:
- Even if you are making payments on a medical bill, it may be sent to collections. (It’s a common misconception that if you pay something, they can’t send the debt to a collection agency. That’s not true.)
- Medical bills sometimes turn up in collections before the patient even gets a bill. At that point, the damage may have been done.
- Collection accounts are usually damaging, regardless of whether they are medically related. (More on this in a moment)
- Paying the collection agency may not fix your credit. In most cases, those accounts are reported for 7.5 years and are not often very damaging – paid or unpaid. (See the caveats below)
- The size of the debt is not as important as the status of the debt. In other words even a relatively small bill that winds up with a bill collector can harm your credit scores.
It is critical that you review your credit reports annually and monitor your credit scores on a regular basis. (Think of it as a checkup for your credit health) you can get a free credit report summary and score, update monthly, at Credit.com. One survey by Credit.com found that 10%of those who reviewed their credit reports discovered a collection account they didn’t know about.
Will a Medical debt in collections Really Hurt My Scores?
You have many different credit scores, not just a single one. (Even among FICO scores, there are many different versions.) The newest version of the FICO score, FICO 9 — ignores paid collection accounts, and medical collection accounts carry less weight under that model. Vantage score 3 also ignores paid collection accounts of all types.
But most lenders still use older versions of credit that do not give medical collections any special treatment. For that reason, you should assume that if you find a collection account on your credit report, it will likely be viewed negatively when you apply for credit, insurance or employment.
So what can you do?
Before one of this bill winds up in collections, to the extent possible, try to be very proactive about your medical bills. Even if you have good health insurance, don’t assume everything will be taken care of. Review your EOBs (Explanation of Benefits) carefully and contact the provider and/or your insurance company quickly if it’s not being taken care of.
If you are contacted by a collection agency about a medical bill, ask them not to report it if you pay it right away (assuming you believe you owe the bill). Some won’t report the bill is resolved quickly.
Again: Having a collection account updated as “paid” generally does not help your scores, unless a lender is using one of the newer credit score versions. So aim for removal of the item if possible. Some agencies will work with you, others won’t.
When you feel unfairly treated
If you feel the situation is highly unfair — you never got the copy of the bill, for example — you can try two things. One is to file a complaint with the Consumer Financial Bureau. The other is to contact the original provider and try to get them you pull it back from collections so you can pay them directly. If they do, the accounts will usually no longer be reported.
If you are contacted by a collection agency and you don’t believe you owe the bill, you have the right under the federal Fair Debt Collection Practices Act to ask the collection agency to validate the debt. You also have the right under the Fair Credit Reporting Act to dispute with the credit reporting agencies reporting the account.
First things first: don’t get discourage. It would be easy to stash away your medical bills in a drawer, or sit them far back on a shelf to collect dust, but the fact is that these bills won’t disappear. And most importantly, you are much, much more likely to receive financial assistance if you work with the provider before the bill is sent to a collection agency.
Luckily, there are many steps that you can take to help your situation and potentially even lower your outstanding bills!
Set up a payment plan
Regardless if you were able to negotiate a longer overall balance or not; providers know that a huge medical bill broken down into small, manageable payment is much more likely to be paid off; so call the provider and ask if they can set up an interest free payment plan. It’s important to speak to the right person and let them know of your situation; and that you’re trying to pay off your debt but lack the income to do so right away.
Tip: Keep in mind that someone who is simply sympathetic to your situation can’t help you – be sure to speak to someone higher up in the billing department directly for the most assistance.
The bottom line is that medical emergencies are never planned, but are always costly. Lucky for you, there are countless resources are available to help you negotiate and even lower your bill; as well as ET up payment plans. Don’t let your bills overwhelm you. As dim as the situation may seem, you can work your way out of it!
Wondering what credit repair is all about? Credit repair is a process of correcting inaccuracies, redundancies and unverifiable information on your credit report, generally you could say that this process is aimed at fixing past mistakes or rather a bad credit report which was disoriented for whatsoever reason. Guess you are already thinking if it is possible to fix a credit report? Well, my answer is a yes and it is no magic neither are the claims to clear your debts. Most often reports sent by credit agencies could come with errors, studies have shown that report 79% of credit report sent have form of error or the other, another has shown that 1 in 5 reports sent have errors in them that could be systematic or some sort of mix up. These when accumulated over a period of time could accumulated into very large sums (even up to hundreds of thousands of dollars pending significance of the found error and how long it has been). These and others factors bring us to the need for a credit repair.
And are you by chance also wondering if it is legal? Of cause yes, it is legal to do a credit repair. Credit repair leverages on the accuracy, fairness of a credit report as well as if it can be substantiated which is in line with the law. Summarily the Federal Fair Credit Repertory Act (FCRA) promotes the accuracy, fairness and privacy of information in the files of consumer agencies but you know, the truth is, many consumers do not know of these rights and privileges that ought to be respected. Let’s suppose there is an item is found on your credit report sent by the credit bureau that cannot be verified, then it must be removed.
How can this be removed? Through the process of credit repair. First and foremost, the credit report has to be thoroughly checked for any abnormalities then and if found, a dispute letter for the abnormal or unverified item is created and sent to the credit bureau for confirmation which could take a period of 30 days (45 days for special cases). This whole process could be tedious and the waiting period could also be frustrating but you must be persistent because it is worth it when you see the outcome and the effect of the result on your credit score. If items are not removed from client credit report, you will have to send follow up letters to the credit bureau reiterating the dispute and reason behind it. One may have to send these follow up may have to be send several times. This process like I said earlier the to and fro process could be tiresome but with the help of a credit repair company such as Fresh Start Credit Repair (FSCR) the whole stress of writing and following up will rest on FSCR. In this case, all you will be needing will sending duplicates copies of necessary document (documents relating to the dispute) which will be needed in the event that the dispute reaches a law court.
Many of us really do not know how credit bureaus calculate credit scores since there are several different lines of credit variations, but I will like to say that they are calculated based on 35% payment history, 30% amount owed, 15% length of credit history, 10% inquires/recent decision and 10% types of credit used, and without a the help of professional that has a full knowledge of this, and how to go about it will be very difficult to comprehend the credit report at FSCR all the professional help needed on how to calculate your credit scores and help you fix all errors on your credit report.
Looking at the procedure of credit repair, the process and how tasking and demanding it is, why don’t you try a credit repair today to make sure that your credit report is perfect? Why not leave it in the hands of a good credit report company that knows the law and also how credit scores are calculated and handle, why not visit us at FSCR and plus the fact that we will give you an opportunity to get free legal advice on how to go about your credit report and repair. Just give us a call and that report of yours fixed.
Today’s internet scene is awash with information on how to retire early and with ease; and it has fast become the dream everyone hopes to experience. The plan is to be able to save enough while you are still working to be able to enjoy that dream retirement, it is quite simple. But if you have some credit or debt issues, you may still find yourself in a mess.
Before you become the next victim, please be aware that debts and credits can rob you of every penny you have saved and turn your retirement into a living nightmare. For obvious reasons, you need to address all issues that have to do with your credit report and records of debts.
Carrying Debt into Retirement
In earlier times it was unheard of for anyone to work throughout his/her youth and then retire in debt, as a matter of fact it was unimaginable, but in more recent times it seems to be happening on a consistent level and that is of no coincidence, something has obviously changed. People no longer care about the concept of retiring debt free and that is largely due to the fact that the level of resentment related to it has dropped massively; therefor proving that the rise of debt among retirees is directly proportional to the consequences/resentment attached to it.
According to the CFPB statistics surveying 2001 to 2011, the mortgage debts owed by Americans aged 65 and above has risen to 35% at an average of approximately $43,400 to over $79,000 within the decade, and obvious signs show that there will be an increase.
What these statistics represents is that people are no longer very careful to live debt-free, they now don’t even care to retire free of debts. To imagine that you will labor all your productive days and then live your old age in debt; it used to be a taboo, but not anymore!
One thing that can considerably lower retirement options is mortgages. Normally, you are meant to have a wide range of options as your retirement closes in on you but, taking a mortgage may affect that, leaving you with very few options. For instance, selling your home for the purpose of cutting down expenses, that might prove difficult, because you’ll have to get extra funds from elsewhere which might end up being your savings, considering the fact that, that will leave you indebted to something you won’t enjoy, that’s not advisable. You may just have to buy another house that is equivalent to your previous house.
Debt Means You’ll Need More Retirement Income
When you are in debt, you can’t actually claim to be earning the full worth of your pay because a certain percentage will be deducted on a regular bases to cover for the debt. So while taking your mortgages makes sure you have calculated the full implications it will be having on your retirement portfolio.
Retiring with debt will mean that you would have to live below the budget that you had crafted out initially, if it’s a huge budget you shouldn’t have much problems with that, but if it not, you might be in for some trouble. As a retiree you are already subjected to a restricted budget and no longer have the privilege of ostentatious spending, and believe me when I say you do not want to make that worse by carrying debts over to your retirement.
That will have a major impact on the amount of money that you’ll need to have saved for retirement. For instance, if you had planned to have the recommended safe withdrawal rate of 4% of your retirement portfolio each year, to make sure you never run out of money, and have budgeted for an income of $4,000 per month, that means you will need to save up an arithmetic of $4,000 X 12 months, divided by .04, which will result in a portfolio of $1.2 million ().
On the other hand, if you happen to require a monthly income of only $2,800 – which is enough to take you by (without any debt of course), meaning that you will only need to save up a the equivalence of ($2,800 X 12 months, divided by .04, which will give you a retirement portfolio of $840,00). Which are less than the previous option and much better also; considering the fact that you will be saving the sum of $360,000 less for your retirement portfolio. Making the job of saving for retirement much more easier and feasible
Credit Problems Can Limit Your Retirement Options
A lot of times people tend to retire solely to the financial aid of what they have saved up which in its own way is quite advisable and very advantageous, it might also not be sufficient. As humans we can only be able to give an attempt in presuming what the future holds, but we can never really give an accurate prediction of what will happen. So, assuming that the money you have saved up will be enough for you might just end up being a flawed assumption. It is for this reason that people are advised to make other investments that will bring forth some returns much later in the future just in case their savings fail them.
The problem with saving for your retirement can be complicated. If you do not happen to be very wealthy, allowing you to save up a huge chunk of money you will only enable you to buy the basic things that you’ll need; it will be incapable of making huge purchases like a new car, house or whatever might cost you a few thousand bucks, else you will get broke. Forcing you to take other loans or mortgages, this may end up spinning off to become a burden to your family due to your inability to pay; that is if you are lucky enough to be granted one. That is could be difficult especially in the post-Mortgage Meltdown world, where mortgages are harder to get in general. With credit problems, it can be
One more problem is should you decide to move into some kind of high class housing arrangement. If credit qualifications are required, your application for residency may be rejected.
Fix Your Credit and Debt Problems Before You Retire
So to what good is all this talk if you are not given to solution to avoiding these ugly occurrences? If you are working hard to accumulate enough money to be able to retire; you should also mind the fact that you are in debt. Make advances towards improving your credit profile in order to settle your debts. Make sure that you acquire assets; especially real estate and other fixed assets so as to reduce the pressure you will face later on in your retirement years.
If you fear that you are not equipped enough to make take this steps or that you do not have the time to plan them; acquire some professional help. Besides as you get older, options become fewer, and your intellectual abilities dimes. So if you plan to lower your expenses and expand your options; it’s best to address credit and debt problems well ahead of retirement; it’s the only way.
I am sure you have heard it before, it is not news. A lot of people say you don’t need an expert to get a credit repair, some say that if you use a credit repair agency, you will be indebted, and some say the services are too expensive; I will give you the same advice that was given by Abraham Lincoln, if you think education is expensive, try ignorance; if you think credit repair is expensive, try living with unjust and unfair credits!
Do not always taker people’s word for it, most of these guys have never even approached a credit repair firm before, they really do not understand how it works; in the final analysis, using a credit repair firm is always better than going it alone or taking advice from just anybody.
Using a credit repair service will definitely improve your credit score. Since your credit report is what determines your credit score, if you are able to detect and correct any mistakes or miscalculations, it will definitely improve your scores. A good credit score is needed for you to get amazing mortgage deals and guaranteed credit with the lowest interest rates ever. Never overlook the power of credit repairs.
Another advantage of credit repair agency is that we can help you trace errors and correct them. It is almost impossible for your credit report to be completely error free. Most of the time, you need the experience and the expertise of an agency to help you identify this errors and guide you on how to go about its corrections. You will not know how much you will miss if you walk this alone.
A good credit repair agency will also help guide you through a direct dispute on your credit report. Having the services of a good credit repair firm will help you state your claim with authority and speed things up in the process of asking for valid and proven correction to your credit report. We at Fresh Start can work you through the process and leave us to the details.
If you have a good credit repair firm at your disposal, you will know the kind of offers you are to apply for and the ones that will just waste your time. What they will do is just to take a look at what you have in terms of your report and they will be able to save you time and stress by directing you to the right credit offer and helps you to work out a plan for safety.
As a form of conclusion, using the services of a credit repair firm can never be a disadvantage if you maximize the opportunities that it offers. You have no business living with avoidable debts and unfair credit reports. You can get in touch with us today and turn the table around!