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Negotiating with bill collectors
If your medical debts haven’t been turned over to a bill collector, it’s possible to negotiate with the company. But before you do this, make sure the bill hasn’t passed your state’s statute of limitations. While this varies from state to state, it’s usually five years. Be sure to check and see when you were initially billed, as the statute of limitations on it might have expired, so you would no longer be liable for it.
If the statute of limitations has not expired, you could negotiate to reduce your balances. Remember what you read above that medical debts are unsecured debts, and thus, subject to negotiation. You could start by offering a lump sum payment of 25% of your balance. If the collector refuses this, go a bit higher. The fact is that most people are able to negotiate settlements of their medical debts for much less than they owed.
If you are able to settle the debt, be sure to get everything in writing. If you fail to do this, your bill might be reported as a partial payment instead of payment in full.
Negotiating with bill collectors over the phone can be intimidating, but it won't be if you use the information you'll learn in the following video.
How to get medical bills in collection removed from your credit reports
If you’re struggling with medical debts, you’re not alone. Forbes has reported that medical debt is the number one cause of personal bankruptcy in the United States.
You could check your credit reports and find that medical bills you had paid off were still there. Unfortunately, if the information is accurate – that you did have medical debts that had gone to collections – there’s not much you can do about it. The good news is that they become less important as time goes by. In other words, a medical debt that’s four years old will not have as much of an effect on your credit as one that’s a year old.
The second piece of good news is that Fair Isaac Corporation, the company responsible for your FICO score, announced last year that it’s now calculating scores differently. The company’s new FICO 9 model weighs medical debt in collections less heavily than other types of debt and does not even consider accounts that have been paid in full. This means that your medical accounts will still appear on your credit reports, but will not have as much of an effect on your score. In fact, according to the Fair Isaac Corporation, this could boost your credit score by 25 points.
The best thing is always to pay off your medical debts before they are sent to a bill collector. You may be able to stave this off by negotiating with your providers. Failing this, you might be able to negotiate with the bill collector to get your balances reduced. If all else fails, and your unpaid debts show up on your credit reports, take heart because they’re at least not doing as much damage to your credit score as previously.