Three readers ask our experts about their medical debt and how to pay it off.

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When your health is on the line, the last thing you want to think about is money. chairman Howard Dvorkin and debt expert Steve Rhode answered some of our readers’ questions about their medical debt, what they should do to get them paid off, and how it will affect their credit.

Is There a “Hardship Clause” to Help Me Get Out Of Medical Debt I Can’t Pay?

Question: We have approximately $40k in debt due to a medical condition that caused us to go broke, lose our income and have no ability to pay. Is there any type of hardship clause to help our situation? Or anything we can do to get back on track?

– Amy B in Connecticut

Steve Rhode, the Get Out of Debt Guy, responds…

Having a financial hardship following a tragedy and unaffordable medical bills is more common than you would expect.

There is a “hardship clause” that will let you regroup and get a fresh start. In fact, it is the only debt relief option that will eliminate your debt in about ninety-days and cost around $1,500 in fees. It’s a Chapter 7 bankruptcy.

If the problems are now behind you and you have income coming in soon, then it is time to deal with the past financial misfortune and get yourself ready for a better financial future.

So many people misunderstand bankruptcy. In horrible financial times, it is not something to fear or be afraid of. It is a legal right you have access to. It is the fastest way out of problem debt for the least cost.

I think you should read, So You Are Going to File Bankruptcy. That’s Good News. Congratulations.

Things can and will get better fast as soon as you close the door on the unfortunate financial past and focus on making tomorrow better. can help you get the fresh start you need with bankruptcy.

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How long does it take a medical bill to go to collections?

With debts like credit cards, the account only goes to collections after six to nine months of nonpayment. But that’s not the case with medical bills. Service providers often send unpaid bills to their collection department or a third-party collector quickly. In fact, even if you set up a payment plan, if you miss that payment by a few days the medical provider may send your account to collections.

Understanding the credit effects of medical collections

The good news is that the three credit bureaus – Experian, Equifax, and TransUnion – agreed to adjust their rules on medical collections.  In 2016, they rolled out the National Consumer Assistance Plan to help protect consumers against unfair credit reporting trends[1]. This included adjusting the rules on medical collections.

Under the new system, medical debt collectors can’t report to the credit bureaus until 180 days after an account becomes delinquent. The law is designed to help consumers avoid collections on medical bills that insurance is supposed to pay. However, it also gives someone who can’t pay six months to make arrangements before the account will appear on your credit report.

The second bit of good news is that even if a medical collections account does get reported, it won’t affect your credit score as badly in newer credit scoring models. Both FICO 9 and VantageScore 4.0 separate medical collections from other types of collections when calculating your credit score. Medical collections have less “weight,” meaning that they don’t negatively affect your score as badly as a credit card debt collection account would.

That’s not to say that you can just ignore medical bills and not worry about collections. However, it will have less of an impact on your credit while you decide how to deal with the debt. And even if you decide to declare bankruptcy to eliminate your medical debt, it may not affect your credit as badly as you may think.

See why Steve says your credit score may recover faster if you decide to file bankruptcy »

What Can I Do About Prescription Medical Debt on My Credit Card?

Question: I have always paid my credit card statement early each month, and I have always bought pre-owned cars in cash. Besides a mortgage that is half paid off, I have no personal debt at all.

However, for the last three months, I have been afflicted with both breast cancer and an unrelated chronic condition. That sounds awful, and it is certainly not fun. But my prognosis is actually quite good, for which I Thank God. 

Here is the financial issue: I need a variety of prescriptions that are costing me up to $1,200 a month out of pocket. That is not only outrageous, it is breaking my budget. I am now forced to run up my credit cards not only for the medication but because I will have to cut back my hours at work. 

Suddenly, for the first time in my life, I have a $12,000 credit card balance, and it is only going to grow. Is there a solution here?  

— Alexandra in New York

Howard Dvorkin answers…

I’m sorry to tell, Alexandra, that you have become a statistic. A recent, obscure report called Super Spending: U.S. Trends in High-Cost Medication Use states, “Between 2014 and 2016, the number of people representing annual medication costs of $50,000 or greater increased by 35 percent.”

That’s right, more and more Americans are facing prescription drug costs of more than $4,000 a month. In fact, three out of every 1,000 people in this study “accounted for more than 20 percent of total pharmacy spending.”

The solution to this problem is beyond me — or even the federal government and the medical industry. Those latter two entities will need to cooperate if a solution is to be found. I don’t know about you, but I’m not holding my breath.

So what can you and others like you do, Alexandra? There are options, which ironically don’t come from the healthcare sector.

Medical debt is a well-known problem in the world of credit counseling and debt management. In fact, it’s one of the leading causes of sudden debt — along with divorce, accidents, and natural disasters.

Of those leading causes, medical debt is among the most complex. It involves not only the actual expenses of treatment but also lost wages and even — as you’ve learned, Alexandra — the costs of prescription drugs that can drain a bank account long after the underlying illness is cured.

I’d urge anyone in this predicament to start with credit counseling. This is a free service from a nonprofit credit counseling agency. You’ll receive a debt analysis that will point you in the right direction. Check out’s report, What Is Credit Counseling… And Why Do I Need It?

From there, you may end up in a debt management program, which isn’t free but will save you much more than it will cost. In the worst case, you can explore bankruptcy. You should also consider signing up for a prescription savings plan such as GoodRx which can save you money on prescription drugs.

The bottom line, Alexandra, is that you’re not alone. Even with strong family support, serious illness can make you feel like you’re all by yourself. When you add in the financial stress of medical debt to illness, that loneliness grows. I’m here to tell you: Help is out there, and it’s a phone call away. Call and will match you with the right solution


Do I Really Have To Pay That Doctor’s Bill?

Question: I had a mole on my face and thankfully, it turned out not to be cancer. But now I owe $1,200 for the procedure and I can’t afford it. My boyfriend says just to ignore the bill and it’ll go away, but that doesn’t sound right.

Won’t that hurt my credit score? Won’t the doctor want his money?

— Kelly in Arizona

Howard Dvorkin CPA answers…

An emphatic yes to both questions. After that, it gets murky.

Medical debt combines two confusing and depressing topics: The healthcare system and the debt-collection industry. That’s why it’s so hard to get straight answers to simple questions. For instance, your medical debt will eventually drag down your credit score. When exactly? Hard to say.

That’s because many doctors and hospitals don’t report debts to the three big credit bureaus (Equifax, Experian, TransUnion). Instead, they simply send the unpaid balances to a collection agency – which not only calls you repeatedly, but will report you to the credit bureaus.

Just one of those reports can ding your credit score by 50 points. That’s a lot when you consider the highest score is only 850.

So what can you do? Negotiate. Collection agencies aren’t known for their flexibility, so you want to negotiate with the doctor’s office or hospital before your debt gets to the collection agency. I’ve heard stories of former patients getting a third or even half of the debt waived.

To do that requires many uncomfortable conversations, however.

You’ll need to prove you can’t afford to pay the entire bill, which means disclosing your family income. It also means paying something, anything right now. You’re more likely to get a break if you offer to make frequent installment payments.

Of course, there are no rules here, so it’s up to the doctor or hospital. Some are very nice about these things. Others send your bill to collections immediately.

So the only crystal-clear advice is this: Be proactive. Call about that debt now.

Having trouble with your medical expenses? We can connect you to a debt expert.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.


Howard Dvorkin, CPA

CPA - Chairman & Personal Finance Expert

Steve Rhode

The Get Out Of Debt Guy

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