Not paying your medical bills after an accident can lead to serious consequences, including damage to your credit score, harassment from debt collectors, and even legal actions like wage garnishment. Understanding these potential outcomes is crucial, but there are options available to help you manage these expenses and avoid financial distress.

Unpaid medical bills can lead to damaged credit scores, making it difficult to secure loans or credit in the future. Collection agencies may become involved, adding to your stress and financial burden. In some cases, you might even face legal action from healthcare providers.

Thankfully, there are solutions to help you manage these expenses. Medical legal funding can provide the financial support you need to cover your medical bills until your case is settled. By alleviating the immediate financial pressure, this option allows you to focus on recovery without the added stress of mounting debt.

The Consequences of Unpaid Medical Bills

Unpaid medical bills can quickly spiral into a financial crisis, impacting your credit score and overall well-being. Understanding the consequences of failing to pay these bills is crucial for navigating healthcare expenses.

Impact on Your Credit Score and Report

One of the most significant consequences of not paying your medical bills is the impact on your credit score and report. If you have medical bills you can’t pay right away, don’t worry. They won’t immediately hurt your credit score. The hospital or doctor’s office usually won’t tell the credit bureaus about your unpaid bills. But if you wait too long, usually around 90 to 180 days, they might send your bill to a debt collector.

Starting in April 2023, the credit bureaus won’t show unpaid medical bills under $500 on your credit report. Even if your bill is over $500, you have about a year before it shows up on your credit report. This gives you time to work with your insurance or find other ways to pay. Once it’s on your report, it can stay there for seven years unless you pay it off.

Debt Collection Harassment

When medical bills go unpaid, healthcare providers often turn to debt collectors to recover the money owed. Debt collectors are notorious for their aggressive tactics, which can include constant phone calls, letters, and even threats of legal action.

The emotional stress caused by debt collection harassment can take a significant toll on your mental health. We’ve commonly seen clients experience anxiety, depression, and other mental health issues as a result of dealing with debt collectors.

According to a 2020 report to Congress, the Consumer Financial Protection Bureau (CFPB) received 82,700 consumer complaints about debt collectors. The Federal Trade Commission (FTC), which regulates the debt collection industry, said that no other industry receives more complaints.

Potential Wage Garnishment

In some cases, healthcare providers may take legal action to recover unpaid medical bills. If a court rules in their favor, they may be able to garnish your wages. This means that a portion of your paycheck will be automatically deducted and sent to the healthcare provider to pay off your debt.

Twenty-one states exceed the federal wage garnishment ceiling. Some states, like New York, entirely prohibit wage garnishment for all patients, while California extends protection to specific low-income populations. New Hampshire requires creditors to return to court each pay period to garnish wages, limiting their ability to do so.

Wage garnishment can make it challenging to meet your other financial obligations, such as rent, utilities, and food. It can also be embarrassing to have your employer know about your financial struggles.

Options for Dealing with Unpaid Medical Bills

Dealing with unpaid medical bills can be overwhelming, but there are several options available to help manage and resolve them, including:

Negotiating with Healthcare Providers

If you’re struggling to pay your medical bills, the first step is to reach out to your healthcare providers. Many providers are willing to work with patients to set up payment plans or reduce the total amount owed.

When negotiating with healthcare providers, be honest about your financial situation. Explain why you’re having difficulty paying and ask if there are any financial assistance programs available. You may be surprised at how willing they are to work with you.

Exploring Medical Legal Funding

If you’re pursuing a legal case related to your medical bills, such as a personal injury lawsuit, medical legal funding may be an option. Medical legal funding, also known as a lawsuit loan, provides a cash advance on your expected settlement.

To qualify for medical legal funding, you must work with a personal injury attorney. The funding company will review your case and determine how much they can provide based on the expected settlement amount.

One of the benefits of medical legal funding is that it’s non-recourse. This means that if you lose your case, you don’t have to pay back the money. The funding company assumes all the risks, which can provide peace of mind during a stressful time.

How Medical Legal Funding Works

Understanding how medical legal funding works can provide crucial financial support during challenging times. This funding option can help cover your medical bills and other expenses related to your case until it’s settled.

Differences from Traditional Loans

Medical legal funding differs from traditional loans in several vital ways. First, no credit check or proof of income is required. The funding company bases its decision solely on the merits of your case.

Second, medical legal funding is non-recourse. As mentioned earlier, this means that if you lose your case, you don’t have to pay back the money. On the other hand, traditional loans must be repaid regardless of the outcome of your case.

Finally, medical legal funding doesn’t charge compound interest. You’ll only be responsible for paying back the initial amount provided, plus a flat fee.

Qualifying for Medical Legal Funding

To qualify for medical legal funding, you’ll need to be working with a personal injury attorney. The funding company will review your case and determine how much they can provide based on the expected settlement amount.

The application process is simple and straightforward. In most cases, you can apply online or over the phone. The loan representatives at Tribeca Lawsuit Loans can help guide you through the process and answer any questions you may have.

Once approved, you can expect to receive your funds within 24-48 hours. This can provide much-needed relief when you’re facing mounting medical bills and other expenses.

Frequently Asked Questions (FAQs)

How long does it take to receive funds after applying for medical legal funding?

In most cases, you can expect to receive your funds within 24-48 hours of approval. Loan representatives will work quickly to process your application and get you the money you need.

What if I lose my case? Will I still have to pay back the medical legal funding?

No, medical legal funding is non-recourse. This means that if you lose your case, you don’t have to pay back the money. The funding company assumes all the risk, which can provide peace of mind during a stressful time.

Can I use medical legal funding for expenses other than medical bills?

Yes, you can use your medical legal funding for any expenses related to your case, including living expenses, rent, and utilities. The goal is to provide financial relief so you can focus on your recovery.

How much does medical legal funding cost?

The cost of medical legal funding varies depending on the specifics of your case. However, Tribeca Lawsuit Loans charges a flat fee rather than compound interest. This means you’ll know exactly how much you’ll need to pay back when your case settles.