With the cost of insurance rising, many people choose to accept the risk of being uninsured. Unfortunately, this can lead to serious medical debt whenever a person ends up in an emergency room or hospital with a serious medical condition. In other cases, a person may have insurance that does not cover a particular procedure; the patient won’t realize until afterwards that the visit was not covered, leaving the individual with a debt that must be paid. Medical debt can quickly add up and become extremely damaging to a person’s finances and credit score.

A doctor’s office or hospital will first attempt to collect the debt from you directly. This may involve a bill sent in the mail or a phone call reminding you that payment is due. Most doctor’s offices understand that patients may be unable to pay for the full cost of medical bills, and they will often work with the patient to develop a payment plan. Sometimes, however, the doctor’s office will not make an aggressive attempt to secure payment, or the patient is unable to set up a payment schedule in time. In these cases, the debt will be given over to a collection agency.

Collection agencies are pushy and ruthless in their attempts to secure payments. Although they are not allowed to use abusive language or threats to secure debts, they are usually not very pleasant to deal with, and they can be extremely persistent. Debt collectors are not allowed to discuss the debt with anyone but the person they attempt to collect it from. This will prevent them from harassing your friends and family, but it also makes it difficult to handle debts that result from billing errors or insurance issues. You, as the patient, will need to run interference to make sure that everyone is on the same page.

What if I Can’t Pay My Medical Debt?

If a collection agency contacts you, they will usually want to secure a payment over the phone before letting you get off the line. This may be the total amount of the debt, or they may offer to settle with you if you agree to a certain payment program. Either way, making a payment will cause the debt collection process to stop until the next payment is due.

If you avoid the debt collector or simply are unable to make a payment at all, the debt collector may sell the debt to another collection agency or they may file suit against you. There is a statute of limitations to filing a lawsuit, however, and the exact figure varies from one state to the next. In most cases, a collection agency has 180 days from the date of the first bill to attempt to secure payment. After this time period has passed, the statute of limitations has been exceeded and you can no longer be sued.

Whenever a lawsuit is filed against someone, they have the right to contest it. You will receive a court summons letting you know that the suit has been levied against you. Be sure not to avoid the court summons; if you fail to arrive in court to defend yourself, the court will lay a default judgment against you for the amount of the suit. This means that you will be legally mandated to pay these fees even if the debt is not legitimate.

After losing a lawsuit, the patient may have their wages garnished. This means that money will automatically be taken from their paycheck and paid toward the debt.

Not all debts go this far. The cost of filing a suit is usually fairly high, so small debts may not go to court. For individuals owing just a few hundred dollars, the collection agency may eventually stop attempting to collect. This will severely damage your credit, however, and the debt will count against you for many years before it drops from your credit history.

Depending on the situation, it will take approximately seven to 10 years for a judgment or unpaid debt to stop counting against your credit. During that time, it may be very difficult to obtain new credit, qualify for loans or even get some jobs. It takes a long time beyond this to rebuild credit, but it’s not impossible. Depending on the situation and the amount of your debts, it may be advantageous to file bankruptcy instead, although this will also negatively affect your credit for the same amount of time.

If you’re ever faced with medical bills that you cannot pay, the best thing to do is try to find an alternative payment plan before the bill goes to collections. There may be an indigent funds program that can help cover the costs, or you might be able to establish a payment program with the doctor’s office.

If you’re unable to catch the debt before it goes to collections, you may be able to benefit from a debt relief agency. No matter what, never neglect your debts; facing them quickly and making an effort to pay, even if you can’t cover the full cost, will always be better than avoiding payments entirely.