The Complete Guide to Repaying Medical Debt

The Complete Guide to Repaying Medical Debt

We all know medical bills can get very expensive very quickly. Luckily, there are lots of different ways you can approach paying them off.

One way is to take out a medical debt consolidation loan. Below we provide a few tips on how to deal with your medical debt and how you can make financially healthy choices in this situation.

The Medical Debt Problem

According to CFPB, a staggering 52% of all overdue debt reported on credit reports is medical-related. And while strides have been taken in recent years to alleviate the weight of this debt on credit reports, the underlying issue of people being unable to keep with their medical bills remains.

The fact still remains that out-of-control interest rates and high monthly payments (sometimes across multiple loans for a single person) leave many people with medical debt in a deep financial hole they may never get out of.

This problem is especially true for immigrants in the U.S.

5 Ways to Handle Your Unpaid Medical Bills

While clearing medical debt is no small task, it doesn’t mean that there aren’t ways to alleviate and make simpler the chore. Below, we list 5 ways that you can start paying down your medical debt.

1. Negotiate the Medical Bills

There are three ways you can negotiate your medical bills

  • Negotiate with your doctors
  • Pay a substantial portion upfront for a cheaper rate
  • Utilize a medical debt negotiation professional

First, you can negotiate directly with your doctors or your hospital. You can tell them what you are able to afford and they might be willing to drop their prices. Or they might be willing to come to a payment agreement you can actually afford.

Second, you can pay a large amount of money beforehand (almost like a deposit) and then pay the rest of the outstanding balance at a later stage. It is important to get the agreement with your doctor in writing before you pay the first lump sum of money.

Third, there are medical debt negotiation professionals who find joy in inspecting your medical bills for mistakes and then negotiating for discounts on your behalf. You might save money doing this on your own, but let’s face it—having a professional doing it might just better your chances of getting that discount. Although you get a discount, a percentage of that discount will need to be paid to these professionals for their services.

2. Ask Friends and Family for Help

We know it can be tough having to ask friends or family to help you out financially. There is the awkward chance they might say no. But if you don’t ask, you will never know. You can try asking your family members or friends to contribute whatever they can to help you with the biggest “chunk” of your medical bill.

No matter how tough or awkward it might be, it is better to ask than end up in complete bankruptcy.

3. Pay the Debt With a Credit Card

Although paying medical debt with a credit card might not be the smartest thing to do, depending on your credit health, it is still an option if you are in a pickle. The reason it might not be the best idea is that you are effectively moving debt that is interest-free (medical bills) to debt which accrues interest (credit card).

Before you opt for this option, the possibility of an emergency popping up in the future should be taken into account. This can be a problem if you have already maxed out your credit card with your medical bills. A higher balance on your credit card can also have a negative effect on your credit score.

4. Seek Help from a Credit Counselor

Credit counselors are employees of not-for-profit agencies (accredited by the National Foundation for Credit Counseling), who educate people about finances and also counsel them for debt, bankruptcy, and credit. Many of these services are offered at a low cost or can even be free.

The first thing a credit counselor will do is listen to your financial goals. They will get as much information as they can to then help you organize your finances. They’ll help you design a budget and assist you in creating an action plan to meet your financial goals. Some counselors might even do a detailed investigation into your credit report and offer tips to improve your credit score.

5. Consolidate Your Medical Debt

Medical debt consolidation is where you take out one loan to pay off all your different medical bills. You will then only have one creditor and one loan to pay off. Usually, the goal of debt consolidation for medical bills is to make managing your debt easier and to save on interest. The new loan you take out should preferably have a lower interest rate than your current debt.

The fact that hospitals don’t charge interest on medical bills might make debt consolidation for medical bills an unwise choice. You’ll end up paying interest you weren’t paying before.

There are, however, scenarios where debt consolidation for medical bills will be a good idea. If you paid your medical bills with your credit card, for example, medical debt consolidation can help because the process will be similar to credit card consolidation.

How to Consolidate Medical Debt with a Stilt Loan

Stilt loans are collateral free personal loans that can be used as the borrower needs or sees fit, even for paying off medical debt to consolidate it elsewhere.

Applying for a loan with Stilt as a visa holder is quick and easy. You also won’t face all the usual obstacles when applying for a loan in the U.S:

  • You don’t need a credit score
  • You don’t need a cosigner

Here’s how getting a loan for your spouse’s education with Stilt works.


Take a look at Stilt’s eligibility criteria to make sure you tick all the boxes. With Stilt, you can apply online making the whole process super simple. You can apply for loan amounts between $1,000 and $35,000. Remember to submit all relevant information, as your information will determine what loan offer you’ll get. You’ll receive feedback from Stilt within 24 hours of submitting your application.

Get Approved

Stilt might schedule a follow-up call with you to verify any last details. After that, you’ll receive your loan offer and a promissory note to sign. Sign and return if you want to accept the loan. Your loan for spouse education in the U.S. will reflect into your account within 2-3 business days.

Start Repayment

Once you’ve got your funds and you’ve got your spouse’s education covered, all that is left to do is to repay your loan. Set up your repayment method of choice. An autopay option is available which automatically deducts your monthly repayment from your account. It will help you to build a good credit report by always paying on time.

It’s that simple to get a loan for spouse education in the U.S.!

Bankruptcy: The Last Resort

Bankruptcy essentially means you can’t pay your outstanding debt. If you file for bankruptcy, the assets you have will be used to pay the debts it can cover, while the rest of the debt will be forgiven.

This might sound like an easy out, but there are a few things you should consider before filing for bankruptcy:

  • Filing for bankruptcy is not a quick fix. It can take up to seven to ten years to fully recover from total bankruptcy.
  • Many lenders will see you as a high-risk customer and will be hesitant to give you loans in the future. Even if you are lucky enough to get a loan, it will most likely come with relatively high interest rates and high monthly payments.
  • Many employers look at your credit report during the hiring process, and being bankrupt can make it more difficult to get a job.
  • Your credit score will take a big hit and it can take a long time to build it up again.
  • You will have to live with the stigma of bankruptcy. Many people who are listed as bankrupt are seen in a negative light. Some states even publish your name in the newspaper.

What Will Happen if I Don’t Pay My Medical Bills?

If you don’t pay your medical bills on time, you will have to pay interest and late payment penalties. Fortunately, there are some state laws where doctors are not allowed to charge interest or penalties on medical bills above a certain amount.

If you take too long to pay your medical bills, your doctor or hospital might send your medical bill to debt collectors. In the cases where debt collectors struggle to get a payment from you, they could take legal action against you. The good news is you can’t be sent to jail for not paying your medical bills.

Finally, leaving your bills unpaid can have a negative impact on your credit score. Rather than not paying your medical debt at all, you can try to pay smaller amounts to avoid having unpaid medical bills, which would negatively influence your financial health.

Are you tired
 of struggling with medical debt?

Consolidate today

Medical debt consolidation loans up to $35,000. No cosigner or credit score required.


Filing for bankruptcy is not the only option if you have high levels of medical debt. Consider options like medical debt consolidation before you opt for bankruptcy. Or consider some of the other alternatives we listed above. The most important tip, however, is to not leave your bills unpaid! This will not only cost you more financially, but it will have a lasting effect on your credit score.

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