Medical Debt Settlement: A Step-by-Step Guide to Reducing Your Bills

If you have several medical bills, creating a debt settlement plan could be in your best interest. A debt settlement plan will allow you to attack the debt and eliminate it in a timely manner, while satisfying your creditors. Here are the basics of creating a debt settlement plan for medical debt. 

Assess Your Situation

The first step in the process is to assess your current situation. Many people feel overwhelmed by their medical bills and truly have no idea how much money they owe. When this is the case, it can be very helpful to gather all of your medical bills together in one place. Add up all of your bills and see where you are. When you do this, it will often seem like a lot less than you thought it was. Once you have a number to work with, you know where you are starting from. This gives you a goal to work toward and will help you in developing your plan. 

Determine Payment Ability

After you see what kind of medical debt you have, you need to determine exactly how much money you can pay towards it each month. Do a detailed budget and be realistic. Look at all of your monthly expenses and include everything that you will need. Remember that you still have to survive so keep the payments manageable. The amount that is left over should be applied to the reduction of the debt. 

Contact Your Creditors

Once you have determined how much you can afford to pay, you need to make contact with your medical creditors and let them know what you are planning on doing. Most of the time, they will be very receptive to the idea and be willing to work with you. You will be able to negotiate a monthly payment with them that will be amicable for both parties. Do this with each creditor and be sure not to exceed your monthly budget. Once you have agreed on a monthly payment with each creditor, they will stop calling you and asking for money. Then you can just focus on putting it into practice and making it work.

Make it Automatic

Once you have set up the payment plan with your creditors, you need to make it automatic. If you consciously have to think about making the payments and write the checks each month, there is a good chance that you will not follow through with making all of the payments on time. 

Set up an automatic payment plan with each of your creditors. Your bank should be able to accommodate this need. You could set up a checking account with the specific purpose of being your debt elimination account. Then setup a monthly payment to each of your creditors from it. Each month, you can automatically transfer the amount of money into it and that way, it is not interfering with any of your other finances.