If you’re unable to pay medical bills after an accident, you’re not alone. In many cases, medical funding becomes part of the conversation when injured people need treatment but cannot afford mounting costs upfront.
The U.S. Consumer Financial Protection Bureau found medical bills were the most common unpaid bills sent to collections. In fact, medical-related issues account for 66.5 percent of all bankruptcies. Left unpaid, medical bills can trigger financial devastation, and your credit score often suffers too.
Why Medical Debt Can Damage More Than Your Finances
Good credit takes years to build. Though a credit score is just a number, it affects the loans consumers can qualify for and their interest rates. Over a lifetime, a higher mortgage rate can cost tens of thousands in extra interest.
After an unexpected accident, your credit score likely is not your first concern.
But it should be on your list.
If your car is side-swiped and you are injured, your focus is likely to:
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seek the care you need and recover,
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hold the liable party responsible, and
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pay off your ER and follow-up medical bills.
Even if the accident was not your fault, unpaid medical bills can still be sent to collections. Once that happens, the collection agency may report the debt to credit bureaus. You may also face constant debt collection calls.
That can damage both the credit you built and your future borrowing power. In many cases, medical funding can help bridge the gap before a claim is resolved.
When Unpaid Medical Bills Start Affecting Your Credit
Medical bills and personal medical history are not reported to credit agencies.
Your credit score takes a hit when unpaid medical debt goes to collections.
In fact, one collection account can drop a good credit score by 50 to 100 points.
The cost of medical care has also skyrocketed.
Few Americans have enough savings to cover unexpected medical costs on their own.
That is especially true after incidents that were not their fault. Emergency departments often lack price consistency. Insurance companies continue to profit, while many plans still leave Americans financially vulnerable.
That is why many injured plaintiffs explore medical funding or support from a medical funding company during a pending claim.
How to Protect Your Credit Score From Unpaid Medical Bills
To protect your credit score, here are some measures you can take:
1. Understand Your MedPay
MedPay, or medical payments coverage, is not health insurance. Instead, it is part of your car insurance policy.
MedPay is no-fault coverage. It can reimburse reasonable and necessary medical expenses after a car accident. This may apply to the policyholder, family members, or others injured in the covered vehicle.
Depending on your injuries, MedPay may cover some early costs. But many people still explore medical funding pre-settlement loan options when treatment continues beyond available auto coverage.
2. Ask for a Payment Plan From Your Provider
Doctors and hospitals do not report medical debt to credit bureaus. Collection agencies do. If you keep medical bills out of collections, you have a better chance of protecting your credit.
One option is asking for a monthly payment plan. Providers may work with you if they see you are making timely payments.
You should also ask whether the outstanding balance can be reduced. The application process can be tedious, but it is often worth the effort. A reduction plus a payment plan can help protect your credit.
Medical billing is complex, so stay in regular contact with your provider and insurer’s billing department. This can help you understand what you owe and how payments are reducing the balance.
There is no law requiring providers to offer payment plans. Still, it is worth asking.
Medical debts in collections can remain on your credit report for seven years. If a payment plan is not enough, some accident victims consider a medical funding case solution.
3. Hire a Trial Attorney Who Specializes in Personal Injury
There are many reasons to hire a lawyer rather than manage a claim yourself.
Insurance providers often pay more attention when a lawyer is involved. Sometimes, that attention alone can make a difference in your case. Attorneys can also work with providers to help protect your credit. They may keep bills out of collections and preserve the credit you worked hard to build.
They may also help you decide whether a medical funding company is appropriate for your case. They can also explain whether a medical funding pre-settlement loan makes sense for your situation.
4. Make Use of Medical Funding
Non-recourse medical funding can help cover medical bills and other expenses during your case. These expenses may include rent, utility bills, and car payments. Non-recourse means you repay the money only if you win or settle your case.
In some situations, a reputable medical funding company can provide needed breathing room. This can help when bills are mounting and recovery cannot wait.
Depending on the arrangement, a medical funding case may help injured plaintiffs access treatment and support. This can happen without immediate out-of-pocket payment pressure.
Many people call this help a medical funding pre-settlement loan. However, its structure is often different from a traditional loan.
Final Thoughts
If you are facing medical debt, do not let your credit score take the hit. During the claim process, there are several ways to protect the credit you worked hard to build.
That may include MedPay, payment plans, attorney support, or carefully evaluated medical funding.
The goal is the same: protect both your health and your financial future.
Remember, your credit score is more than just a number. Like you, it needs to recover well after the accident.
FAQs
How can I find companies that help reduce medical debt?
Start by speaking with your attorney. They may already know reputable options related to liens, payment negotiations, or medical funding. You can also ask providers about hardship programs or payment assistance.
If you are considering a medical funding company, review the terms carefully.
Understand the repayment structure and whether it depends on your case outcome.