[USER]

How would you approach medical debt and credit card debt totalling about $40k?

Had a rough year after buying a house and moving cross country.

I lost my remote job/insurance and of course immediately got sick and was hospitalized.

This time drained most of my savings and put me in debt ($30k medical, $10k credit card.) Some smaller bills have already been sent to collections and will start showing up on my credit report within a year.

I do have some savings left (about $15k) but I don’t want to dump all or most of that towards bills right now.

I’m well-ish again and recently back at work making decent money.

My goal is to resolve this debt as quickly as possible but I’m not sure what to do beyond making payments. Appreciate any advice!

[Robert]

From what I understand, even if you are only paying a marginal amount- 5 bucks; 10 bucks; or something like that per month…… You are still paying on the debt and it cannot go to collections.

That is what I would do.

[Emily]

Can you retroactively get cobra health insurance.
I’ve never had to do it, so I don’t know how it works (or even if the time limit has passed)

But my understanding is you have access to cobra for a certain amount of months after losing a job.

You don’t have to access it right away, but if something happens, you can sign up for it retroactively.

I would at least look into the option because my knowledge is limited and I definitely don’t know the details, but if it is possible for you, that could be a huge difference.

Also, if you do need to negotiate, you can not just ask for a payment plan but negotiate the total price too.

[Kathy]

I’m so sorry you went through a severe illness! It sounds like you’ve already negotiated down the medical debt and were unable to get COBRA coverage from your prior job.

If it were me, assuming budget flexibility/excess, I’d pay the minimum on medical debt (typically not accruing interest at the rate of a cc) to begin with while paying down the cc debt as quickly as possible (possibly using part of my savings).

Once cc debt is gone, then make sure to optimize the usual tax-deferred savings and then concentrate on paying down the medical debt.

[Rebecca]

Negotiate with the hospital. Apply for forgiveness programs

[Jill]

That really sucks. I’m sorry you find yourself in this situation. But given th aret you have already negotiated your bills, there is only 1 solution: pay your bills.

Pay your credit card ASAP using your savings and make arrangements to pay off what has gone to collections, then set up payment plans for the rest.

Get a second job, cut expenses, whatever it takes to get clear as soon as possible.

[Teresa]

First of all ask the medical providers if they will settle for a certain amount if you cannot retro your cobra coverage

[Kevin]

Call them up and tell them your situation. Tell them you’re not a deadbeat & that you’ve just fallen on hard times with the good intentions of paying them back.

Ask them for a payment plan that allows that to happen. I’m sure they’ll accommodate.

That’s what I would do. Best of luck to you.

[Author]

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