Blogging for Change

Everything You Need to Know About Medical Debt

by Jesse Campbell on
8/19/2025
in Repaying Debt
Nurse working at check out desk.

The following is presented for informational purposes only.

Medical bills can appear suddenly—whether from an accident, a major illness, or an unexpected procedure—and they can quickly overwhelm even the most carefully planned budget. And this isn’t rare. According to a report by the Kaiser Family Foundation, approximately 14 million adults in the United States owe over $1,000 in medical debt, and about 3 million adults owe more than $10,000.

So what makes medical debt a unique challenge? How does it affect your credit? What options do you have if you can’t pay? Let’s break down everything you need to know—plus practical steps you can take today.

How is medical debt different from other debt?

Medical debt isn’t like credit card debt or personal loans for several reasons:  

  • Medical debt is usually unplanned. Unlike taking out a loan or opening a credit card, medical bills often stem from an emergency or necessary treatment.
  • It often comes from service providers, not lenders. Hospitals, doctors, and clinics aren’t banks—they likely have their own billing systems, charity programs, and timelines.
  • Interest and fees are typically lower, or maybe even nonexistent at first. Medical debt often doesn’t accrue interest immediately, unlike credit cards or payday loans.

What are your options for paying medical bills?

If you’re staring at a stack of bills and wondering how you’ll manage, you’re not alone. The good news is that you have options, and acting early can prevent the situation from becoming even more stressful. Before panicking or reaching for a credit card, explore these options:

  1. Verify the bill: Medical billing errors are common. Request an itemized statement and confirm charges before paying.
  2. Ask about a payment plan: Most hospitals and providers allow patients to spread payments over time, often with little to no interest. You may also be able to negotiate down your balance.
  3. Explore charity care and financial assistance: Nonprofit hospitals are legally required to offer financial assistance policies. These programs—sometimes called charity care—can reduce or even eliminate your bill based on income and need.
  4. Use savings or an HSA (if available): If you have an emergency fund or a Health Savings Account, this is the moment to use it.
  5. Third-party financing: Some providers work with financing companies. But be cautious—these loans may come with interest rates and terms that make repayment harder.
  6. Avoid credit cards if possible: Charging medical bills to a credit card can lead to high-interest debt. If you must use a card, try to pay it off in full before interest accrues.

What happens if you can’t pay your medical debt?

If you ignore your medical bills, here’s what could happen:

  • Providers may send unpaid bills to collection agencies.
  • Your credit score could take a hit; collections appear on your credit report and lower your score.
  • Legal action is possible. Providers or collectors may sue, potentially leading to wage garnishment.
  • Medical debts cannot be added to your credit report until 180 days after being reported to a bureau.
  • Paid medical collections (or those paid by insurance) must be removed from your credit report under the National Consumer Assistance Plan (NCAP).

Steps to take if you’re struggling with medical debt

If you’re finding it difficult to manage medical debt, the first and most important step is to contact your provider as early as possible. Many hospitals and medical offices offer payment plans or financial assistance programs, but these options are easier to arrange before your account goes to collections.

Next, take time to review your entire budget. Look for expenses you can reduce or cut temporarily to free up money for medical bills without sacrificing essentials. Finally, don’t hesitate to seek expert guidance. Organizations like MMI offer free financial counseling and debt relief programs to help you create a plan for managing debt and building future savings.

If you've used a credit card to pay for medical bills, or if you've accrued credit card debt as a result of unexpected medical debt, a debt management plan (DMP) can help you get out of debt in as little as 24 months thanks to average interest rates below 7%.

If your debts are delinquent or in collections, you should consider a debt resolution plan, a nonprofit version of debt settlement with lower fees and a more consumer-friendly fee structure.

Take control of your medical debt today

Medical debt can feel overwhelming, but you have options. From payment plans to financial assistance programs—and strategies to prevent potential credit damage—the sooner you act, the more control you have.

If your medical debt has led to credit card balances or other financial strain, we’re here to help. MMI offers free, no-obligation counseling available 24/7 online or by phone. Take the first step toward relief today.

Tagged in Managing medical bills and debt, Debt collection, Laws and legal questions

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

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