The Help Desk

Your tough questions. MONEY's smart answers.
Presented by

Should I let my medical bills go to collections?

May 29, 2012: 2:11 PM ET

Before and after my son's birth in 2010, I racked up medical bills I couldn't pay at the time. At first I was on a payment plan, but then I ran into some financial difficulties and I fell behind. I made partial payments but couldn't make full payments. Now I'm being asked to pay the amount I missed in full, or the balance will go to collections. Should I let the bill go to collections and see if I can get a more flexible payment plan?
-- Name withheld

Letting your medical bills go into collections is not your best move. Your credit might not even be affected by this debt now, but it will be if you let it go to collections. "Medical debt is rarely reported to the bureau until it is charged off and sold to a collection agency," says Gail Cunningham, a spokesperson for the National Foundation for Credit Counseling. "This means that even though you're currently delinquent with the provider, it has probably not been reported, so your credit isn't tarnished."

Once it goes to collections and dings your credit report, it will be there for seven years, making credit more difficult to obtain. Mortgages, car loans, additional credit cards — you'd probably pay a higher rate on all of those if you apply for them after this. Having the debt on your credit report could also affect insurance rates and employment, since employers often check credit before hiring.

Your best bet is to keep trying to work out a better plan with the provider. Explain, in detail, why you can't pay what they want you to pay. If necessary, lay out your finances for them. Help them see that you absolutely do not have the extra money lying around, but that you could manage a different payment plan, and pay that on time. "The last thing you want to do is promise to pay an amount that you can't responsibly make long-term," Cunningham says.

— Kate Ashford

Got a question for the help desk? Send it to

Posted in: Family Money
Join the Conversation
Help Desk

Got a question about your money? We want to hear it! Each week we're answering your questions on CNN, Headline News and CNNMoney.com.

Your email or phone number won't be published; we'll use it to get in touch if we need more information about your question.
Help Desk Video
  • NEXT
    Not enough money in America's 401(k)s
    Despite the surging stock market bringing balances to record highs, the average Fidelity 401(k) account has less than $100,000 in it. That's just not enough. Play
  • NEXT
    BACK
    Explaining Obama's myRA
    President Obama unveiled a new savings plan for retirement accounts, aimed at encouraging people to start building their nest egg. But how exactly does it work? Play
  • NEXT
    BACK
    Tricks on how to save in your 20s
    Saving for your retirement in your 20s doesn't have to be a financial burden. Prioritizing your expenses is usually the first step in building a nest egg. Play
  • BACK
    Don't get fooled by Black Friday sales
    Here are some of the tricks that retailers use to make you think you're getting a deal. Keep an eye out for them while shopping this Black Friday. Play
Best Tips
Some of the nation's leading business owners, investors, and thinkers share their thoughts on rebuilding your wealth. More
These strategies can help you manage the challenges -- both emotional and financial -- of helping an aging parent from afar. More
You don't need to be fanatical to get to 780. Those in the know say these moves matter most. More
Featured Newsletters

Tips for saving and spending smarter.

Search This Column
View all entries from this: Week, Month
Help Desk
More help for your career, your investments and your budget.
Powered by WordPress.com VIP.