My mother's Credit cousler told her to put her medical debt at the bottom of the list when cleaning her credit up. Is that true?? Should we focus of loans, credit cards etc, first before we worry about Medical debt???
2007-01-11 09:30:01 · 7 answers · asked by **What??** 4 in Business & Finance ➔ Credit
My husband and I just finished dealing with this one. They probably told you that because the medical companies are the least likely to turn you over to collections and report, but they will and they do! They also don't charge interest.
A medical debt is the ONLY negative thing on our credit at this time, and we were paying some each month. Anyhow... here's what I would recommend to get yourself out of debt. It's called the Debt Snowball.
-List all of your debts in order from least owed to the most along with your monthly payment.
- Make your minimum payments on everything.
- Focus on the smallest debt first and put any extra money you have each month on that until it's paid off.
- The move on to the next smallest debt until everything is paid off.
They say that personal finance is 20% math, and 80% personal behavior. By doing it this way, it seems more do-able. It's what we're doing now, and it IS working. We've already paid off $1300 since late December.
Good luck!
2007-01-11 10:30:44 · answer #1 · answered by Jen G 5 · 2⤊ 0⤋
Someone recently told me--and I don't know how true it is--but they said as long as you make some effort to pay, even a dollar or $5 a month toward medical, they cannot report you or send you to collections. You have to keep up with the payments. That is not like a credit card company or other kinds of debt, so maybe that is why the credit counselor put it at the bottom on the list--he knows that if all your mom has left is $1 after all the other creditors, that will still be enough to pay toward medical.
2007-01-11 10:00:29 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Probaby as lenders do look differently upon medical debt. The purpose of lenders using credit reports is to make a reasonable assessment of the likelihood that the borrower will repay the debt based on how the borrower has handled credit in the past and the borrowers current debt load. Credit card debt and other consumer debt is usually debt acquired by choice where as medical debt is acquired out of necessity and therefore lenders do distinguish between the two when ascertaining creditworthiness. That doesn't necessarily mean that your mother will be able to obtain a loan anytime soon but if I were to prioritze the order of payoff I would agree with the credit counsler.
2007-01-11 09:51:12 · answer #3 · answered by SmittyJ 3 · 0⤊ 0⤋
Well, you should know that medical debt does not fall off your credit report after 7 years like other credit does. Our medical debt stayed on for 10 years and kept us from getting any kind of credit.
2007-01-11 09:35:34 · answer #4 · answered by smartypants909 7 · 0⤊ 0⤋
They probably say that because the doctor can't repossess his services. That said, creditor usually view medical debt differently then other debt on the grounds it often is not the result of irresponsible behavior. You can avoid credit card debt by not buying things you can't afford. The same is not always true of medical debt.
2007-01-11 11:27:41 · answer #5 · answered by STEVEN F 7 · 1⤊ 0⤋
He probably said that because your wages can't be garnished for medical debt, but it can for other things.
2007-01-11 09:53:57 · answer #6 · answered by Anonymous · 0⤊ 0⤋
That is usually what they tell you...but I'm not sure how true it really is.
2007-01-11 09:34:35 · answer #7 · answered by BMW BFD 5 · 0⤊ 0⤋