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Debt relief options for addressing older medical bills

For many California residents, medical debt is at the top of their list of financial concerns. Medical bills have a tendency to pile up, and even those who have health insurance are often faced with high balances to pay when coverage is not sufficient to address all of one's medical needs. There are a number of approaches one can use to handle older medical bills, which can help an individual's current financial situation as well.

One solution is to simply let the older debt fall off of one's credit report as the seven-year reporting timeline approaches. This may eliminate the debt from one's credit, but in many cases the statute of limitations exceeds the debt reporting timeframe. This can lead to a creditor or collection agency filing a lawsuit to collect the unpaid debt.

Yet another approach involves contacting the creditor or collection agency directly and attempting to work out a repayment plan. However, consumers should be aware that on the date they make any form of payment on a debt, the statute of limitations for legal action starts anew. Unless an individual is certain that he or she can repay the debt in full, this may not be the best option.

In many cases, filing for personal bankruptcy is the best means of eliminating medical debt in a permanent manner. Not only can old medical bills be discharged through a California bankruptcy, but many other forms of debt can be included. The result can be a clean slate, and the ability to focus on rebuilding one's financial health.

Source: Fox Business, "What's the Best Way to Handle Old Medical Bills?" Steve Bucci, Jan. 11, 2013

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