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Medical debt is a big-time problem in America. In fact, you may not even realize how big the problem is. Here are a few quick facts:

  • Over half of the collections on American credit reports are for medical debts.
  • 59% of people who file for bankruptcy say medical debts were a contributing factor.
  • About a third of Americans carry some form of medical debt.
  • Nearly one out of six Americans have been contacted by a debt collector because of a medical bill.

Medical debt can be a problem for a lot of reasons. Medical bills are (often intentionally) confusing. It can be deeply frustrating to try and pay off debt—especially if you’re ill. And many Americans actually put off going to the doctor—or don’t go at all—out of fear of medical debt.

It can certainly feel unfair to be forced to pay for something that you had no control over, such as an injury or an illness. If you’re struggling to make your monthly payments, or you feel like you owe too much in medical bills, you’re not alone.

And here’s some good news for a change: Help is available. 

The first step in tackling your medical debt? Know your options.

There are a lot of options out there, when it comes to finding relief for your medical debt. Choosing the best option will depend on your situation. Two of the most common forms of medical debt relief are known as “medical debt consolidation” and “medical debt settlement.” We’ll explain these approaches, and dive into their pros and cons, below.

What is medical debt consolidation?

Medical debt consolidation involves obtaining a new loan to cover outstanding medical bills. If you have trouble keeping up with all your payments each month, this strategy might make sense for you. That’s because medical debt consolidation combines multiple payments to various creditors or companies into a single monthly loan payment. Debt consolidation loans can also be used to assist with other kinds of debt, such as money you owe from credit cards or personal loans.

However, there are a few drawbacks to consider with medical debt consolidation:

  • Debt consolidation loans can be harder to qualify for if you don’t have good credit.
  • If you do qualify for a debt consolidation loan, the money you receive might not be enough to cover all of your outstanding debts.

In short, even if you qualify for a medical consolidation loan—no guarantee—you may still have to figure out a way to pay your remaining debt.

What is medical debt settlement?

By contrast, medical debt settlement is the process of negotiating with creditors to reduce the amount of money you’re required to pay back. A typical debt settlement agreement could reduce what you owe by up to half, or even more. There are debt settlement professionals who dedicate their careers to specializing in these types of negotiations. These trusted advocates will handle the entire process for you, and their experience and power with creditors could help you settle your debt faster—in addition to lowering the amount you owe.

An important side note: As with the debt consolidation option, debt settlement companies can also help with other existing unsecured debts, like credit card debt, streamlining all of your debt payments into a single monthly payment. An additional benefit of using debt settlement for credit card debt is you’ll receive a lower interest rate throughout your repayment period. (This isn’t generally a factor with medical debt, as medical bills are typically zero interest.)

However, like with the debt consolidation option, medical debt settlement does have its drawbacks.

  • You wouldn’t want to try and tackle the debt settlement process yourself.
  • Some debt settlement companies can be untrustworthy. Make sure the company you choose doesn’t charge any upfront fees, and check out their reviews to make sure they’re legitimate.
  • Debt settlement will have an initial hit on your credit score but  you should see improvements in the long run as your debts are settled.

Choosing the best option for you

Before making a decision, we recommend doing your research. Here are a few articles that could help you with this important decision:

 Another good place to start with this process is by using the CreditAssociates debt calculator, to see how much you could save with a debt relief plan. It can also be helpful to speak with a certified debt consultant. Reputable debt settlement companies will provide you with a free, no obligation evaluation—and again, make sure they require no upfront fees.