<p>Hi there,</p>
<p>I very sincerely apologize for asking this question here. I am at a loss on where to get some insightful advice. I am also extremely embarrassed to ask my family and friends on what to do… </p>
<p>I am in debt and my credit score is seriously in the lowest of the lows.</p>
<p>The debt is not that much: About $5,000. All of it are medical expenses (about 6 items). One is a credit card, but is already paid. I ignored all of the medical bills, for I had nothing to give them and was focused solely on school expenses. I let these bills go to collections and let the collection agencies harass me for 2-3 years (I deserve it). I am now in a position to clear all of it up in one go. </p>
<p>I pulled up my free annual credit report and saw that all my debts are scheduled to appear on my credit report for the next 3-5 years. I am a little confused as to what that means. My questions are:</p>
<ol>
<li>Will all my debts be cleared up after 3-5 years even if I don’t pay them?</li>
<li>Will paying my debts reset the time it’s supposed to “not” appear in my credit report back to 7 years?</li>
<li>Is it worth paying it or just let it be buried by time? (I want to pay it, but also don’t want to shoot myself in the foot)</li>
<li>Any tactics regarding paying off old debts are greatly appreciated, especially on the little things I can do to slowly redeem myself and my credit score.</li>
</ol>
<p>Please don’t judge me too much. I fell ill and did not have insurance. I was torn whether to use the money I had saved up on school or the medical bills. I chose to go to school. I am a good person and am always looking to give back whenever I have any extra things to give. I would always bring at least $2.00 worth of coins to church every Sunday for donations. </p>
<p>Thank you very much in advance for everyone that took the time to read this. Even if there are no responses, thank you very much. Taking the time to read this is absolutely more than enough. Thank you.</p>
<p>My thoughts are…you may be able to clear your credit report by…</p>
<p>Offering to pay a percentage of the debt as paid in full.</p>
<p>Ask the creditor to clear your credit report if you pay the agreed upon amount. </p>
<p>Deal directly with the creditor if possible.</p>
<p><a href=“How to Remove a Charge-Off From Your Credit Report”>http://credit.about.com/od/creditrepair/a/repairchargeoff.htm</a></p>
<p>It will always help your credit to pay the debts. If you (or anybody else here) ever have huge medical bills again, don’t ignore the statements. They will work with you more amiably than any other creditor. I had a huge medical expense last year and when I called to set up a payment plan, they simply said “How much can you pay us a month?” I’m paying it off, interest free, at the exact amount I told them I could pay. This allows me to pay off other debts with interest at a faster pace so I can eliminate all the debt sooner. I used to put medical bills on charge cards but have learned that this is not a good way to go. </p>
<p>Also - add good references to your credit to help increase the score. Do you gave a credit card? Use it and pay it off every month. If you don’t have a credit card - see if you can obtain one - even a secured one - to build credit. Or - ask a family member with good credit to add you as an authorized user to one of their credit cards. They don’t even have to give you an actual credit card - just being added as an authorized user will increase your score, assuming they have a great ontime payment history.</p>
<p>Don’t pay any company for credit repair. Waste of money. As your bad debt gets older and/or resolved and as you add good references, it will improve with time. Nothing to be ashamed about.</p>
<p>Have you negotiate the debts with the medical provider. Most of the medical bills are over stated, You should negotiate the the amount vigorously with the medical provider if they will reduce their bill and directly reduce the credit card charges to ease your payments. Do that first, then start negotiate with each credit company to establish a payment plan. You should have your total indebtedness consolidated with a clear list with you when you start the process. </p>
<p>One point regarding medical bills - hospitals and docs have contracts with different insurance companies for different amounts they’ll accept for the same service. However, they bill all of them the same amount, and then take a “contractual adjustment” resulting in receiving different amounts from them, and still zeroing the accounts. For this reason, the providers typically have their “nominal” charge above the highest payment an insurance will give just so that they don’t leave money on the table with some of them if they bill too low, but never expect to receive the charged amount. A “full” payment from some insurances like Medicaid could be just 20% of what they bill.</p>
<p>So what I’m getting at is this - if your medical bill is based on you not having an insurance, most of them will give a discount off the list price for self pay accounts. Non profits probably have a charity write off too based on your income level and will adjust a fraction or all of the amount. </p>
<p>If your balance is due to a deductible, coinsurance, or copay, they are typically less flexible because the amount due already has been adjusted from the amount billed. But still the first thing I’ll do is go to the actual provider and negotiate a discount on the balance, and a monthly payment plan to settle it. Self pay account collection rates are low, so many would agree to getting something than nothing.</p>
<p>PS - There really is no reason for you to apologize for asking the question or be embarrassed about the situation you’re in.</p>
<p>The debts you owe will not just go away. Interest will accrue and your debt will increase. And it is more than likely too late to negotiate with the medical providers, since the debts have been turned over to collection agencies. You can TRY, but you may have better luck negotiating with the debt collectors at this point.</p>
<p>Paying them off in one fell swoop if you can, or over time, will improve your credit score eventually. </p>
<p>Debt happens, but it can be dealt with. Just deal best as you can with the shame and instead take pride in working to eliminate it. Don’t look back (accept to learn the lesson that it’s best to deal with your debtors right away to arrange payments), but look forward to doing better in the future. (This coming from someone who is working to reestablish a good credit after losing a 780+ credit rating due to a crisis-induced bankruptcy).</p>