Navigating the complexities of medical billing systems is extremely difficult. Make sure the provider accurately calculated the bill and that you owe it before you pay. There also may be protections under federal and state law as well as financial assistance that you may be entitled to claim.
Medical bills are complicated and often hard to understand. Factors like your provider, your health insurance company, and your eligibility for financial assistance or “charity care” will determine whether you owe the bill, and if so, how much. Additionally, laws at the federal and state level may help protect you from some medical bills as well as provide protections from debt collection and credit reporting.
You can take steps to make sure that the medical bill is correctly calculated and that you get any available financial or necessary legal help. If you don’t pay, you might have to deal with late fees and interest, debt collection, lawsuits, wage garnishments, and your credit score going down.
Not being able to pay your bills can be a stressful and concerning situation. However, it’s important to understand the potential consequences of unpaid bills so you can take steps to resolve the issue This article explains what can happen if you miss bill payments, including impacts to your credit, debt collection, and legal action
Your Credit Score Will Be Damaged
One of the most immediate effects of not paying bills is damage to your credit score Creditors report late and missed payments to the credit bureaus, which causes your score to go down
According to credit experts, a single missed payment can cause your credit score to drop by up to 100 points. Consistently missing payments on several accounts will cause even more dramatic drops. A low credit score makes it difficult to get approved for loans, mortgages, apartments, and other services.
Even if you eventually pay the overdue amount the late payment will remain on your credit report for 7 years. This means the damage to your credit can be long-lasting if you continue to miss payments.
You’ll Owe Late Fees and Penalties
Not paying your bills on time can hurt your credit score and usually leads to late fees, interest charges, and other penalties. After your due date has passed, creditors will start adding fees. The later you pay, the higher the fees.
Your credit card company might charge you $25 for being late even if your payment is only a few days late. If you’re 30 days late, this could go up to $35 or more. Loan companies, cell phone companies, mortgage lenders, and other service providers also charge late fees.
If you have a credit card or loan, not making payments will likely cause the interest rate to shoot up. Your card or loan agreement likely allows the creditor to raise your rate significantly when you default. This results in owing much more interest.
The Debt Will Go To Collections
After a couple of months of non-payment, creditors will pass your account to a debt collection agency. The original creditor essentially writes off your debt and sells it to collectors for pennies on the dollar.
When your debt goes to collections, this will show up on your credit report. Collection accounts are major red flags that drag down your score.
Debt collectors will also start contacting you demanding payment through phone calls and letters. Under the Fair Debt Collection Practices Act, collectors cannot harass you, but they will be persistent. Ignoring collectors will cause them to ramp up their efforts.
You May Be Sued
A debt collection agency may decide to go to court if polite requests for payment don’t work. It is thought that debt collectors file millions of lawsuits against people every year.
If someone sues you for a debt and you lose, the court can make a decision against you. This gives the debt collector a lot of power to get the money you owe them. Your wages can be taken away, your bank account or property can be seized and sold, or a lien can be put on them.
Judgments on your record also appear on credit reports and can stay there for up to 7 years. This makes judgments extremely damaging.
Services Get Disconnected
Being past due on bills like utilities, phone/internet, insurance, and other ongoing services may result in disconnection. Since these are required ongoing expenses, having them cut off creates major headaches.
Utility companies, phone/internet providers, and insurance companies can legally suspend service if you fail to pay after a certain time period. This leaves you without vital services until you get caught up on what you owe.
Secured Property Is At Risk
Not paying bills that are tied to property, like a home or car loan, means the lender can repossess that property. These are known as secured debts.
If you become delinquent on auto loan payments, the lender can take back your car. With a mortgage, the lender will begin foreclosure proceedings if you are 90+ days late, which may result in losing your home.
Losing an asset like a home or car that you rely on because you missed loan payments can be catastrophic. This is why it’s critical to take action if you fall behind on secured debts.
You Could Face Legal Consequences
Though rare, not paying certain types of bills can potentially lead to legal trouble. For example, consistently failing to pay child support can result in contempt charges and even jail time in some cases.
Not paying taxes is another area where legal consequences can come into play. If you owe back taxes and do not make payment arrangements, you may face IRS enforcement including asset seizures and criminal prosecution for tax evasion in extreme cases.
Tips for Dealing With Unpaid Bills
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Contact creditors immediately if you will miss a payment and explain your situation – they may grant some leeway.
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Prioritize secured debts (home, auto, etc.) and essential utilities first.
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Explore assistance programs that may be able to help pay bills.
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Work on a payment plan that allows you to pay back what you owe over time.
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Consider credit counseling or debt consolidation services to negotiate with creditors.
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Be proactive and take action – ignoring the issue makes it worse.
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Protect your credit by making at least minimum payments if possible.
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Know your rights under consumer protection laws like the FDCPA if dealing with collectors.
While missing bill payments can spiral into a stressful situation, being proactive and understanding the potential consequences allows you to minimize the damage as much as possible. Communicating with creditors and seeking assistance early on provides the best chance of getting back on track financially. Though it takes time to rebuild credit and pay off debt, taking ownership of the issue and creating a plan puts you on the path to eventually resolving unpaid bills.
What if I still owe the bill?
If you still owe the bill or a part of it, here are some options:
- Try to get the bill lowered so that you can pay it.
- Ask if the provider will accept an interest-free repayment plan
- Get help paying your medical bills, prescription drugs, and other costs. There are nonprofits that can help you with both money and drugs that you need for your health care or certain health conditions.
- If you want to pay the bill with a credit card or a medical credit card, be careful. There could be a lot of interest, and you might not be able to get out of the debt. There may be better options like an interest-free repayment plan.
You also have protections from faulty credit reporting or if you are contacted by a debt collector.
Is there financial help or “charity care” for my medical bills?
Financial assistance programs, sometimes called “charity care,” provide free or discounted health care to people who need help paying their medical bills. The Affordable Care Act (ACA) requires hospitals with 501(c)(3) nonprofit status to have programs to provide this care . Some states have charity care laws that also require additional free or discounted care to be provided by hospitals.
People over 65: If you apply for and are approved for the Qualified Medicare Beneficiary (QMB) program, doctors, suppliers, and other service providers should not charge you for Medicare-covered services and goods. This includes deductibles, coinsurance, and copayments. If a provider asks you to pay, that’s against the law. If the medical provider won’t stop billing you, call Medicare at 1-800-MEDICARE (1-800-633-4227). TTY users can call (877) 486-2048. If you’re a Qualified Medicare Beneficiary, Medicare can ask your provider to stop billing you and refund any payments you’ve already made.
What Would Happen If You Stopped Paying Your Bills?
FAQ
What happens if you never pay bills?
Your financial crunch may be temporary, but your credit record is enduring. and overdue bills can haunt you for years to come. No matter how tempting, trying to ignore a mounting pile of bills is the worst thing you could do. You’ll end up with late fees, interest charges. and a ruined credit rating.
What happens if you refuse to pay a bill?
What happens if you refuse to pay a business because the price was not what you agreed to pay? First you should attempt to resolve the dispute with the business directly. There are other mediation or arbitration steps that can be taken if that fails. The end result could be a lawsuit.
What happens if you stop paying a bill?
The longer you go without paying, the more likely you are to rack up fees, damage your credit score, see your interest rate soar, be harassed by debt collectors, and even face legal issues.
What happens if you can’t pay any bills?
If you owe money and you’re struggling to pay You should speak to the organisations you owe money to – they might let you pay smaller amounts or take a break from payments. Don’t ignore bills or letters about money you owe. You can find out how to start dealing with your debts.
What happens if I don’t pay my bill?
If you don’t pay your bill, the company will turn the information over to a collection agency. Once this happens, the collection agency will start by calling you.
What happens if you don’t pay a debt collection agency?
If you don’t pay a debt collector or collection agency, they will probably try to get the money from you more and more, possibly through phone calls, letters, or even social media. Not paying a debt in collections will also hurt your credit score. If you don’t pay, the collection agency can sue you to try to collect the debt.
What happens if you don’t pay your debt?
The phone will start ringing, and the letters will start coming in a campaign to get you to pay. If you can pay the debt or come to an agreement with the debt collector, you’ll quickly be free of debt. If you can’t, you may find your stress levels rising – especially if you have secured debt.
What happens if I don’t pay my utility bill?
If you don’t contact your provider, they may suspend or disconnect your service. Not paying could also harm your credit score. You can get a step-by-step plan on how to handle your debts at the National Debt Helpline. You can apply for a utility rebate or voucher by contacting the agency in your state directly.
What happens if you can’t pay your medical bill?
If you can’t pay your medical bill at the time care was received, then it’ll turn into medical debt, something that many Americans face.
Can you be jailed if you don’t pay your debt?
You can’t be jailed for failure to pay the debt. Despite this, some people are still finding themselves facing – and even serving – jail time for unpaid debt. According to the FTC, collection agencies buy debt for an average of 4 cents for every dollar of debt.
