There is no scope of declining the need for healthcare when you fall sick or meet an accident. At that moment, you might not have the scope to check your savings or the credit card balance. The primary concern is always health improvement, not the expenses. You may start worrying about the healthcare cost when you are on the mend. You may also be worried about the health insurance plans and the coverage. Were some of the processes optional? You cannot leave the hospital before recovering to keep the bill low. What if you cannot pay the hospital bill?
The after-effects of not paying medical bills are quite predictable. Here are five outcomes that can come your way assuming you have ignored the medical bill.
1. Late fees and interest
The healthcare provider will start to pressure you for paying the healthcare debts and they will add late fees or other interest charges to the principal balance. Those additional charges will start accumulating and increase the amount over time. An 8% interest rate on a bill of $20,000 bill can add $133 to the bill monthly and it will add $1,600 annually.
Start checking the documents that you have signed before commencing the treatment to understand how much interest and fees can be charged to you. The healthcare providers also should explain how they deal with unpaid bills and this information is available in the fine print of the onboarding documentation. If you find a document signed by you where you have agreed to pay interest and charges, you have agreed to the interest terms. The good part is these extra charges can be negotiated and you should contact the provider to set up a new payment plan.
2. Debt collectors
When the balance remains unpaid for a longer than expected time, the healthcare providers can contact a debt collector for healthcare debt collection. When the healthcare debt is unpaid for more than 90 days, the service providers can send it to a collection agency. At this point, you will get repeated phone calls and notifications from the debt collector. You can try avoiding these calls but the debt collectors are very persistent and patient to keep you calling repeatedly.
3. Credit damage
The debt collection agency will report the healthcare debt to the credit bureaus. The major credit bureaus are Experian, TransUnion, and Equifax. Before the healthcare debts appear on the credit report, the bureaus wait for 180 days.
Your credit score will drop once the waiting period ends and the unpaid debt becomes a part of the credit history. The aftereffects of low credit scores are quite far-reaching and impact your finances later on. You would get in trouble to get a new credit card or any kind of loan or you may fail to qualify to get the lowest interest rates. This problem will continue for the next seven years. For this seven years span, the issue will stay in the credit report.
If the collection agency cannot make you pay, they can file a lawsuit against you. The providers sue the borrowers to get a judgment against them from the court. Once the debt collectors have a judgment against you from the court, they become more aggressive in the collection process and can go ahead with a wage garnishment, bank levies, and liens.
5. Liens, wage garnishments, and levies
A lien is a form of a claim that is placed on the property by a creditor. Typically, the creditors pursue the lien against the home. It gives the creditors the right to get repaid from the procedure of selling the home. The lien can make it difficult for you to refinance.
A wage garnishment is a legal way of withholding a part of your earnings to repay your debts. The federal government has drawn a limitation of wage garnishment that is 25% of the after-tax income but even this amount can be enough to affect your household budget.
A bank levy is one of the most serious actions a creditor can take against a debtor. When a bank levy is applied, the creditor pulls money from the bank account of the debtor without permission. Moreover, any funds going to the bank account will be seized. Quite naturally, a bank levy can worsen your financial hardship.
If you are in trouble with medical debts and the debtors are not paying the debts, you can call our professionals for healthcare debt collection.