Ready to say goodbye to student loan debt for good? Learn More

Getting Out Of Medical Debt

Upsolve is a nonprofit that helps you get out of debt with education and free debt relief tools, like our bankruptcy filing tool. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card.  Explore our free tool

In a Nutshell

Medical debt can sometimes seem overwhelming, but there are things you can do to resolve it. Learn how medical debt can affect you in the long run, how to negotiate and set up a repayment plan, and what forms of assistance could help you pay for medical costs. Also, find out if filing for bankruptcy could help you to discharge your medical debt.

Written by Attorney Kimberly Berson
Updated August 10, 2023

The cost of healthcare in America is out of control. It has left many Americans with crippling medical bills. Even those who have health insurance may be burdened with significant medical debt. Insurance companies don’t always cover all medical costs. During the coronavirus pandemic, more and more people became overwhelmed by medical debt. Many people faced unexpected extended hospital stays or emergency room visits after contracting the coronavirus. Now, they have to deal with mounting medical bills. Some people are suffering from long-term coronavirus health problems. This just adds to the pile of medical debt. 

What can you do to get relief from medical debt? This article will discuss medical debt and ways to get out of it.

Studies Show That Medical Expenses Are Financially Draining For Many Americans

If you are struggling with medical debt, you are not alone. The Affordable Care Act was enacted to ensure that Americans have affordable healthcare insurance. But the reality is, health care isn’t affordable in America. Many people can’t afford to get the healthcare they need. Some are still uninsured. Others may be insured, but their health insurance coverage may not include certain medical procedures. They are left having to pay the medical bills that aren’t covered. Other people may have to pay out of pocket for medical care because their health insurance plan has a high deductible. Even Medicare doesn’t cover all medical costs, making supplemental health insurance coverage necessary. President Biden has promised to make healthcare more affordable to all Americans. But, until there is a change, many American families will suffer financially after suffering a medical crisis.

Studies have shown that over the last 12 months, medical expenses have doubled for low-income people. This is a result of the pandemic this past year. But, the burden of medical debt is nothing new. When the Kaiser Family Foundation surveyed the burden of medical bills, it found that 25% of adults (or members in their household) had problems paying medical bills. Most Americans are $400 away from serious financial trouble. Sadly, many folks who are hit with an unexpected medical expense of more than $400 don’t have the cash to pay for it. A $1000 medical emergency could push many Americans into debt. 

The U.S. Census Bureau conducted a survey that included the question, “Do you have medical bills you are unable to pay?” Based upon the respondents’ answers, it was determined that 19% of U.S. households couldn’t afford medical care upfront when they received it in 2017. Also, the respondents’ feedback showed that households with kids under 18 are more likely to have medical debt than those who don’t have kids. 

How Medical Debt Can Affect You

Not paying your medical bills can have serious consequences. Paying a medical bill late by a month or two shouldn’t affect your credit score. But, not paying a medical bill at all will show up on your credit report. When a medical bill becomes significantly past due, the health care provider’s office will likely turn it over to a collection agency. Typically, health care providers don’t turn over a medical bill to collections until it is past due for 90 days or more. Some may wait 180 days. Once it is in collections, the unpaid medical bills will be reported to the credit bureaus: Experian, TransUnion, and Equifax. Any unpaid debt, such as student loans, health care bills, or credit card bills, will affect your credit score

The most commonly used credit score is called the FICO score. The newest version of the FICO score, the FICO 9, doesn’t include medical collections in calculating the credit score on your credit report. This change was made after determining that unpaid medical bills are not a good measure of a person’s credit risk. Many people with medical debt weren’t aware of it. They assumed their health insurance paid the medical bill. 

The FICO 9 change is good news. Lenders use FICO credit scores when deciding whether to give people loans. Also, the interest rates charged on loans may be affected by credit scores. The bad news is that the older versions of FICO show unpaid medical debt in your credit history. So, this may affect a lender’s decision to extend you future lines of credit, or give you a student loan or a credit card if your credit report reflects old FICO score calculations.

Debt Collection And Lawsuits  

A debt collection agency is a third party that is in the business of collecting debt. Within the broader debt collection industry, there are collection agencies that specialize in collecting medical bills. A health provider may hire a debt collection agency to collect an unpaid bill that is significantly overdue. The health provider may even sell the unpaid medical debt to a collection agency. 

Debt collectors won’t go away. They will aggressively seek to collect unpaid medical debt. Unpaid medical bills usually incur late fees and interest. Dealing with debt collectors can be stressful. They will send you letters and call you about your unpaid debt. But, you are protected from certain debt collection practices. The Fair Debt Collection Practices Act (FDCPA) prohibits a debt collector from using abusive, unfair, or deceptive practices when collecting a debt. They can’t contact you at work if you tell them not to. They can’t call you before 8 a.m. or after 9 p.m. The FDCPA applies to the collection of student loans, credit cards, and any other consumer debt.

Debt collectors may start a collections lawsuit against you. If so, you will receive a summons and a complaint. You will be required to answer the complaint by a certain date. Answering the complaint is a good idea because, if you don’t, a default judgment will probably be entered against you. If the debt collector gets a judgment against you for the amount of the unpaid medical debt, they can take action to turn the judgment into money. They can go after part of your wages through wage garnishment or they may levy your bank account. In some states, they may be able to sell your real property to pay the judgment. There is no guarantee that if you answer a complaint that you’ll win the lawsuit. But if you fail to answer that complaint, you’ll lose any opportunities you may have to successfully defend yourself against it.

Upsolve Member Experiences

1,683+ Members Online
Ms. Bridget Norvell
Ms Bridget Norvell
★★★★★ 5 days ago
This is an awesome service...I would recommend this to anyone who is in need of filing for bankruptcy but can not afford an attorney.
Read more Google reviews ⇾
Nicole Ditimus
Nicole Ditimus
★★★★★ 5 days ago
Helped me to feel able. Nothing but relief and thankfulness in my heart.
Read more Google reviews ⇾
kel allure
Kel Allure
★★★★★ 7 days ago
simple. straightforward. informative
Read more Google reviews ⇾

Negotiating Medical Debt

Check The Bill For Errors

If you receive a very high medical bill, you might be able to negotiate a debt settlement with the health care provider. Before you start negotiations, take time to thoroughly review the medical bill. Check for any mistakes.  You may have been incorrectly charged twice for something. You may have been billed for a procedure that wasn’t performed. Your insurance company may not have paid for a medical procedure that is covered under your insurance plan. 

If there are mistakes, you can try to resolve them with the health care provider. Your insurance company and health care provider will have an appeals process. If there are errors in the medical bill, raise those mistakes on appeal. Insurers don’t like to pay medical bills and will try to disclaim coverage when they can. You can appeal a claim that was denied coverage. Also, make sure to correct any mistakes related to this bill that may have already been reported to the major credit bureaus. Otherwise, these mistakes can drag down your credit score. 

Begin Discussing A Settlement

Start negotiations with the healthcare provider after you’ve researched the bill. If you find errors, contact them and request a reduction in the amount of the bill. You can also request to be billed at the same rate that the insurance company is billed. Insurance companies are typically billed at a lower rate. The provider may be more inclined to work with you if you agree to pay the medical bill upfront at a reduced amount.  

If you need help, you can work with a medical billing advocate. A medical advocate’s job is to help you resolve medical debt. They represent you and your interests. Some organizations provide credit counseling to help patients deal with medical debt. There are also non-profit organizations that act as patient advocates. Finally, a lawyer can also help you negotiate a settlement for an overdue medical bill as well. 

Repayment Options

You may be able to negotiate a repayment plan with the healthcare provider or debt collector. If your personal finances allow you to pay the debt over time, a payment plan is a good option. But, don’t agree to a plan structured in ways that won’t allow you to make your payments on time and in full. 

Another option would be paying the medical debt with a low-interest rate credit card. This approach will allow you to pay it off over time. Note, however, that you’ll be charged interest on any amount remaining on the card each month. You can also take out a low-interest loan to pay the debt over time. 

Getting Help For Medical Debt

You shouldn’t be embarrassed to seek financial assistance to pay for medical costs. Even the most financially responsible Americans may suffer significant financial fallout from unexpected medical expenses. Your medical provider may offer options for those unable to successfully manage large health care costs. You should check your eligibility to apply for government benefits, such as Medicaid or other federal or state programs. Ask your healthcare provider for information regarding these programs. The Commonwealth Fund is an organization that seeks to provide high-quality health care to everyone, but especially to low-income people. They may have programs available to help you as well. 

Bankruptcy And Medical Debt

Bankruptcy may help you achieve medical debt relief. Medical debt is an unsecured debt. Debt that is unsecured means that payment isn’t tied to any property. Medical debt is often discharged in bankruptcy. Bankruptcy doesn’t treat all debt the same. As soon as you file for bankruptcy, most collection actions must stop because of the automatic stay. So, filing for bankruptcy will get the debt collectors off your back and may absolve you from the requirement to repay your medical bills.

What Type Of Bankruptcies Are Available

Individuals usually file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 is a liquidation proceeding wherein assets you can’t protect might be sold by a trustee to pay your creditors. (However, this is very rare, as most individuals who qualify for Chapter 7 relief are able to protect their assets from this risk.) In a Chapter 13 case, you and your lawyer will create a plan that pays back your creditors a certain amount over 3-5 years in manageable monthly installments. Unsecured medical debt may not need to be paid in full under the plan. 

There are advantages to filing for bankruptcy. You can discharge your medical debts and get a fresh financial start. Also, debt collection activities must stop. The disadvantage of bankruptcy is that it will be on your credit report for years and will negatively affect your credit score. It can take time to rebuild your credit again. But it can be done. 

Let’s Summarize…

Medical debt can be very stressful. It can affect you in many ways. Failure to pay medical bills can negatively affect your credit score. But there are ways to deal with medical debt and to give you debt relief. You should always carefully review your bills. There could be errors, and you may be able to reduce the amount owed. You can negotiate a debt settlement with the healthcare provider or debt collector. You can also see if you can enter into a payment plan. There is financial assistance available from non-profit organizations. 

Bankruptcy is also an option for managing medical debt that you can’t repay. It will give you the fresh start you need. To learn more about bankruptcy, visit the Upsolve website. You might be eligible to use the free tool to help you file for bankruptcy under Chapter 7. Don’t allow the burden of medical debt to continue to overwhelm you. There is help available for you.

Written By:

Attorney Kimberly Berson


Kimberly Berson is an attorney with over twenty-five years of legal experience and a specialty in bankruptcy law and bankruptcy litigation. Additionally, Kim is an instructor in the paralegal certificate program at Hofstra Law School where she teaches Bankruptcy Law, Contracts La... read more about Attorney Kimberly Berson

It's easy to get debt help

Choose one of the options below to get assistance with your debt:

Considering Bankruptcy?

Our free tool has helped 13,919+ families file bankruptcy on their own. We're funded by Harvard University and will never ask you for a credit card or payment.

Explore Free Tool
13,919 families have filed with Upsolve! ☆

Private Attorney

Get a free evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families resolve their debt and fix their credit using free software tools. Our team includes debt experts and engineers who care deeply about making the financial system accessible to everyone. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.