How to Manage Medical Debt

It always happens when you least expect it—serious injury or illness can strike at any moment, and¬†wreak havoc on both our health, and our financial situation. Debt can mount to exorbitant levels from medical expenses, and many of us find that we cannot manage that debt without some sort of outside help. Consumer debt counseling agencies work with clients everyday who are otherwise responsible consumers, but have run into financial trouble when they experienced a personal injury or illness. Medical debt can affect consumers who aren’t prepared.

Don’t panic. It’s important to be patient as handling medical debt is often a complex process that takes time. Help is available from many sources, including consumer debt counseling agencies that can offer debt repayment options.

Steps to Deal with Medical Debt

  1. Before you miss a payment to any of your creditors, call them to see if you can work out a payment plan. Ask if you can make smaller payments every month, or have a little more time to pay your bill. Creditors would rather be paid something rather than nothing, so most of the time, they will work with you.
  2. Always be courteous and polite when dealing with your creditors. Explain your situation to them, and make a good faith effort to make some sort of payment–even a small one–every month.
  3. Pay toward your highest interest credit cards each month.
  4. If you owe many creditors and cannot effectively manage your debt, contact a consumer debt counseling agency for help. These consumer debt counseling agencies can provide you with a guidelines and an action plan get out of debt once and for all, as well as teach you tools for successful debt management in your future.

Know Your Debt Management Options


If your medical debt becomes excessive, you may be eligible for some well-deserved help from the Internal Revenue Service (IRS):

  • If your medical debt exceeds 7.5% of your adjusted gross income, you are eligible to claim that remaining amount of debt as an itemized deduction on your federal income tax return.
  • A list of allowable medical (and dental) expense deductions is available from the IRS (call 800.829.3676). This could include such expenses as prescription drugs and long-term nursing care.


  • “If it sounds too good to be true, it probably is.” This saying can apply to many life events, but it also pertains to medical debt management. If someone promises to eliminate your debt by combining your medical debt with another form of debt (such as credit card debt), this is probably not the best solution for you. Your interest payment alone will add significantly to your total debt. This could also make you ineligible for Medicaid coverage because debt on a credit card is not considered to be medical debt.
  • Also, it is important to prioritize your debt. If debt collection agencies suggest that you pay your medical debt before other types of debt such as mortgage or other secured debts, beware of this advice.

Additional Debt Management Advice for the Uninsured

If you are currently uninsured, and have suffered from serious injury or illness, managing your debt can be daunting. Here are some tips to help you cope:

  • Find out about local free clinics. Often, university medical centers provide services provided by medical students at reduced costs.
  • Ask your pharmacist about generic prescription drugs. Sometimes, there are cheaper alternatives to the ones your doctor prescribes.
  • Contact your state health department and ask about Medicaid coverage, which is provided for lower income households and people with high medical bills.
  • If you are 65 or older or have a disability, contact the U.S. Health Department and inquire about Medicare coverage.

Good Debt Management Skills to Prepare Ahead

You never know when you might be affected by a serious injury or illness, so it is a good idea to take preparatory measures just in case.

Make sure that you have a good insurance plan. Health insurance is simply getting too expensive for many. However, if you are considering reducing your medical coverage to save money, or considering having no insurance at all, it’s not a smart idea. It’s a risk not worth taking for either yourself or your finances. Medical debt, in fact, is one of the three leading causes of personal bankruptcy, according to the Consumer Bankruptcy Project. And according to a survey by The Commonwealth Fund, 70% of the uninsured respondents reported having to deplete their savings to pay for medical care.

Open a savings account. Exercise good debt management skills by depositing a small percentage of your monthly income in it, just in case you need it one day. Ideally, you should keep between three to six months worth of income in a savings account at all times.

Ask for help for your Debt Management Needs

It’s easy for medical bills to add up fast. If you’re struggling to meet the minimum payments, a consumer debt counseling service, like Clearpoint, offers a wide array of services, from budget counseling to a debt management program. Call 800.750.2227 (CCCS) to speak with a credit counselor or get started online.

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