What to do if you can’t pay your medical bills

You did the responsible thing. You saw the doctor when you had to. Maybe you went to the emergency room when you had no choice. Now you’re staring at a bill you can’t afford—and wondering what that means for your financial future. Medical debt is different from other kinds of debt. It’s not something you signed up for. You didn’t go shopping. You didn’t take out a loan. It’s often unplanned, sometimes unavoidable, and almost always emotionally loaded.

But here’s what matters: medical debt is navigable. You have more options than you might think, and more power than it seems. The key is to shift from panic to planning—and to separate what’s urgent from what’s unfixable. Let’s walk through what to do when you can’t pay medical debt, step by step, from triage to long-term strategy.

Step One: Understand the Bill Before You Act

When you receive a medical bill, it’s easy to feel overwhelmed. But not every document that looks like a bill actually is one. Your insurance provider might send an Explanation of Benefits (EOB)—which outlines what was charged and what they covered—but this is not a bill. Look for a statement marked “Amount Due” from the provider. That’s when payment timelines start.

Once you receive the real bill, request an itemized statement. This lists every charge line by line, so you can verify the accuracy of services, supplies, and medications. Common errors include duplicate charges, incorrect coding, or being billed for procedures never received. It’s worth reviewing this carefully, especially for high-cost visits such as surgery, emergency care, or inpatient stays. This step alone can prevent overpaying by hundreds or even thousands of dollars.

Step Two: Confirm What Insurance Covered—and What It Didn’t

Medical billing often includes surprise gaps in coverage. Out-of-network providers, partially denied claims, or services not pre-authorized can leave you responsible for large balances. Review your Explanation of Benefits and compare it to your medical bill.

If your insurer didn’t cover something you believe they should have, call them and request a review. Ask whether:

• The provider submitted the correct codes
• The service was denied due to missing pre-authorization
• You were charged as “out of network” during an emergency (which might be protected by law)

You’re allowed to appeal insurance decisions. It’s tedious but possible—and sometimes the only way to get clarity on a four-figure charge.

Step Three: Ask About Financial Assistance

Many hospitals, especially non-profits, are legally required to provide financial assistance or charity care to low- and moderate-income patients. Even if you’ve already received treatment, you can retroactively apply for assistance. Start by calling the hospital’s billing office and requesting their financial assistance policy. Most will require documentation like pay stubs or tax returns, but in return, you might receive:

• A significant discount
• A full bill waiver
• A sliding scale based on income and family size

Even if your income seems too high for help, you may qualify based on other factors such as dependents, medical hardship, or uninsured status. If you were in the emergency room or admitted without consent for provider networks, you may also be protected by the No Surprises Act, which limits what hospitals can bill you for out-of-network services.

Step Four: Don’t Pay the Bill With a Credit Card

It may seem logical to pay the medical bill with a credit card to avoid collections. But this move converts medical debt into high-interest consumer debt, which is often harder to negotiate later. Medical providers usually offer more flexible terms than credit card companies. That includes zero-interest payment plans, settlement discounts, or delayed billing during hardship.

Once you pay with a credit card, those options vanish—and you’re on the hook for interest that compounds every month. A better option is to negotiate a direct payment plan with the provider. Ask if they offer a “prompt pay discount”—many will reduce the total owed if you can pay something upfront, even if it’s only a portion of the balance.

Step Five: Set a Realistic Payment Plan—and Put It in Writing

Once you understand the total amount and have explored discounts or assistance, negotiate a payment plan you can actually sustain. Don’t agree to pay $400/month just because that’s what they asked for. Instead, be honest about what you can pay based on your budget. A payment as low as $25 or $50 per month may be acceptable—especially if the provider sees that you’re committed and communicative.

Get the plan in writing. Confirm the following:

• Total balance
• Monthly amount
• Number of months
• Late payment penalties
• Whether the plan prevents your account from going to collections

Most importantly, ask if interest or fees will be added. Medical providers often offer interest-free terms—but only if requested.

Step Six: Protect Your Credit While You Pay

Thanks to recent changes by the three major credit bureaus (Equifax, Experian, TransUnion), medical debt is handled differently from other kinds of debt.

As of 2023:

• Paid medical debt no longer appears on credit reports
• Unpaid debt under $500 is excluded entirely
• You have 12 months before unpaid medical bills are reported to credit bureaus

This grace period gives you time to resolve or dispute the debt before it damages your credit score.

If you’re being contacted by a collections agency for a medical bill that’s less than a year old, confirm the date of service and whether it qualifies for this delay. If they’ve already reported it, you can dispute the entry with documentation. And if you eventually pay or settle the debt, ask for it to be marked as “paid in full” or “settled in full”—language that helps minimize credit damage.

Step Seven: If You’re Being Sued or Harassed, Get Help Immediately

A lawsuit for unpaid medical debt can feel terrifying—but it doesn’t mean you’ve failed. It means the timeline has escalated, and now legal protections become more important. If you’ve been served with a court summons, don’t ignore it. Ignoring a court notice often leads to a default judgment—meaning the court automatically rules against you. This could result in wage garnishment, bank levies, or liens.

Instead, respond to the court. You can often represent yourself in a small claims hearing or seek free legal aid, especially if your income is limited. You also have rights under the Fair Debt Collection Practices Act (FDCPA). Debt collectors cannot:

• Call at unreasonable hours
• Threaten arrest or violence
• Misrepresent the amount you owe
• Contact you at work if you’ve asked them not to

You can request all communication in writing and dispute the debt within 30 days of initial contact. If you suspect a violation, report the agency to the Consumer Financial Protection Bureau (CFPB) or your state attorney general’s office.

Step Eight: Consider a Certified Credit Counselor

If the debt is substantial—or one of many—you may benefit from working with a nonprofit credit counselor. These professionals help you:

• Consolidate debts
• Build a payment plan
• Advocate with providers and collectors
• Protect your credit from further damage

Organizations like the National Foundation for Credit Counseling (NFCC) offer vetted services. Always avoid any group that charges large upfront fees or promises “quick debt elimination.” Medical debt takes time and process to resolve properly.

Step Nine: Bankruptcy Is a Last-Resort Tool—But Not Shameful

If medical bills are part of a larger debt crisis—especially following a long illness or disability—you may need to consider bankruptcy. Medical bills are considered unsecured debt, and can be discharged in bankruptcy filings.

There are two main types:

• Chapter 7: Erases qualifying debt but may require liquidation of assets
• Chapter 13: Creates a court-approved repayment plan based on income

Bankruptcy will affect your credit for 7–10 years. But if you're already behind on rent, utilities, or food due to medical debt, it may be the cleanest reset. Before deciding, consult with a licensed bankruptcy attorney or legal aid group. Most offer free initial consultations. A good advisor will walk you through alternatives first and only recommend bankruptcy when truly appropriate.

Once the immediate crisis is addressed, it’s time to build resilience into your financial life—even if your income feels tight.

Start with what’s possible:

• Create a medical emergency sinking fund, even if it’s just $10/month
• Consider a high-deductible health plan (HDHP) with a Health Savings Account (HSA)
• Ask your employer about flexible spending accounts (FSAs) or other benefits
• Review your insurance network annually to reduce out-of-network risks
• Build a basic will and medical power of attorney, especially if you have dependents

No one can predict an illness or injury. But you can build systems that reduce future shock.

Medical debt doesn’t reflect bad choices. It reflects a broken contract between healthcare and affordability. You didn’t fail. The system failed to protect you from the cost of survival. But you still have tools. You still have agency. And even if it takes time, there’s a path to recovery—one decision at a time.

You are not alone. And this moment, difficult as it is, does not define your financial life. It’s one part of your story—and with the right support, it can be the beginning of a more resilient plan.