Updated: Jul 28
If you’re dealing with medical debt under $500, you’re not alone. According to a survey by the Kaiser Family Foundation, one in four Americans struggle to pay their medical bills. And while the amount of medical debt may seem small, it can still have a significant impact on your credit score and financial wellbeing.
So, will medical debt under $500 be removed? The answer is not straightforward. Here are a few things to consider:
Collection agencies may still pursue payment. Even if the debt is small, collection agencies may still attempt to collect payment. If you ignore the debt, it could eventually go to collections and negatively impact your credit score.
Some states have laws that protect consumers from medical debt. Depending on where you live, there may be laws in place that limit the amount of interest that can be charged on medical debt or prevent debt collectors from garnishing your wages.
Negotiating with the healthcare provider may be an option. If you’re struggling to pay your medical bills, it’s worth reaching out to the healthcare provider to see if you can negotiate a payment plan or a reduced amount.
Ultimately, it’s important to remember that medical debt, no matter how small, can impact your credit score. Even a single missed payment can cause your score to drop by as much as 100 points. If you’re struggling to pay your medical bills, it’s important to explore your options and take action to protect your financial wellbeing.
The Impact of Medical Debt on Credit Scores
Medical debt can have a significant impact on your credit score. According to the Consumer Financial Protection Bureau, medical debt is the most common type of debt in collections, and it can stay on your credit report for up to seven years. In addition to lowering your credit score, medical debt can also make it more difficult to get approved for loans or credit cards. Lenders may view medical debt as a sign of financial instability, and may be less likely to approve your application.
Options for Dealing with Medical Debt
If you’re struggling with medical debt, there are several options available:
Negotiate a payment plan: Contact the healthcare provider and explain your situation. They may be willing to work with you to create a payment plan that fits your budget.
Apply for financial assistance: Many healthcare providers offer financial assistance programs for patients who are struggling to pay their bills.
Consider a personal loan: If you’re unable to negotiate a payment plan or qualify for financial assistance, a personal loan may be an option. However, it’s important to consider the interest rates and fees before taking out a loan.
Seek credit counseling: A credit counselor can provide guidance on managing your debt and creating a plan to pay it off. They may also be able to negotiate with the healthcare provider on your behalf.
File for bankruptcy: While it should be a last resort, filing for bankruptcy can eliminate medical debt. However, it can have a significant impact on your credit score and financial future.
While there is no guarantee that medical debt under $500 will be removed, there are options available for managing and paying off the debt. It’s important to take action and explore your options to protect your credit score and financial wellbeing. Remember to communicate with your healthcare provider, seek assistance if needed, and consider speaking with a credit counselor for guidance.