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Should I file bankruptcy over medical debt?

Unpaid medical bills from an accident or illness that wind up in collection can really tank an otherwise adequate credit score. Consumers can avoid fiscal disaster by remaining proactive about their finances.

Make sure that you examine and thoroughly read your monthly medical bills and any policy changes or explanation of benefits.

Sometimes a doctor's or other medical provider's bill winds up not getting paid by your insurer through some kind of clerical or coding error. Yet, you are the one who will be reported to the three major credit bureaus.

If you see that a legitimate provider isn't getting paid, call your insurance carrier and ask why. Don't be afraid to call weekly until it's resolved. As long as you are civil in your dealings, remember that the squeaky wheel gets the grease.

If it's a small amount that you can afford, it's preferable to pay it off yourself and battle it out with your insurer than to wind up in collections over $200.

Sometimes, however, you simply just won't be able to pay off all of your medical bills. Doctors and hospitals usually will agree to work with patients and accept an agreed-upon amount each month or pay period until the debt is extinguished. Some providers will even agree to take an account out of collections as long as the patient agrees to pay.

Many hospitals and providers have financial assistance programs for which you may qualify if you meet certain financial criteria. A final option is filing for Chapter 7 bankruptcy. The end result is a discharge of your debts and a clean financial slate.

Source: Bankrate, "Prevent medical bills from spoiling credit," Liz Weston, accessed April 20, 2017

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