Bankruptcy

Save on Medical Bills (and Other Pesky Expenses)

By Chris Kramer

Considering that a significant number of Americans who seek bankruptcy protection do so at least in part because of overwhelming medical bills, there's a little-known trick that could prove financially amazing for some individuals. A recent article from the New York Times suggests a very simple technique for saving money on doctor?s bills.

The Trick

Luckily, this ?trick? for knocking as much as 25 percent off your medical bills isn?t complicated or difficult. Here?s what you have to do:

• Call the hospital or doctor you visited when you have a copy of your bill.
• Ask if you can have a 25 percent discount if you agree to pay in full over the phone (which usually means giving a credit or debit card number).
• Wait for results.

The caveat here is that you actually have to have 75 percent of the bill available in cash; otherwise, the strategy won?t work. But, if you?ve developed a savings account for emergencies or even for routine medical costs, you?re probably in a good position to give this a whirl.

Why It Works

So why would hospitals and doctors agree to accept less than the amount they charged you, often without any sort of negotiation? Because, according to sources, many are accustomed to patients who cannot pay, refuse to pay, have their debts discharged in bankruptcy or otherwise avoid payment in full.

After all, medical debts are dischargeable in bankruptcy and emergency procedures can cost a pretty penny, especially if you?re not insured or insured well.

Where Else You Can (And Can?t) Try It

The good news (if you?re willing to start saving some money to try this trick elsewhere) is that the medical world isn?t the only one that might accept an offer for immediate, partial payment.

Consider trying it for one of your credit cards: if you have a significant balance on one card but have saved up a portion of what you owe, try calling your company and asking to make a lump payment for that portion, in exchange for their excusing the rest.

It?s a good idea to get such an agreement in writing, so if your issuer consents, be sure to include your agreement in writing when you send payment. Like medical bills, credit card debt can be discharged in bankruptcy, and many issuers will be happy to accept a guaranteed portion rather than risk losing all of it if you file.

The trick probably won?t work, though, for student loans. Because these are not usually dischargeable in bankruptcy court, student lenders have little incentive to settle for less than what you owe.

Full post as published by The Bankruptcy Blog on August 09, 2010 (boomark / email).