Negotiating Payments on Outstanding Debts

Released: Wednesday, June 8, 2011

Negotiating Payments

By Jennifer Spina

United Breast Cancer Foundation has given me such a great opportunity to help so many women and families who have been affected by breast cancer.  Every day I review applications for women looking for help with their medical bills, rent/mortgage and everyday household bills.   These are the top three requests for assistance among my applicants.  Medical bills can be exorbitant and feel as if you may never get out from under the payments and this goes for the rent/mortgage payments (if fallen behind) as well as the household bills, such as utilities.   So many families are looking for the assistance of UBCF to help pay for these bills and we accommodate families with these payments as much as we can, but there is something that you can do as well to assist yourself with mounting bills.  Here are a few things you can do to get your payments in order:

Utility Budget Billing:

What is budget billing?
Budget billing is an important tool to help gas and electric customers who have difficulty paying sharply higher utility bills during the winter heating and summer cooling seasons.

Under a budget billing plan, customers’ bills (based on prior payment and consumption experience) are averaged out over the course of the year so that the customer pays the same amount every month. This system of equal and predictable monthly payments makes it easier for customers to plan their household budgets and avoid unnecessary utility shut-offs during the winter and summer months.  Call your local utility provider and ask about budget billing.

Medical Bills:

Try to negotiate a payment plan. Your hospital or provider may be willing to accept smaller monthly payments. Keep in mind that your payments generally need to be reasonable and you must keep up with your payments.  Here are some things to consider when negotiating a payment plan:   

1        1.      Notify the appropriate offices quickly.

          2.      Keep in touch with your creditors.

          3.      Record the names and phone numbers of the people you are dealing with.

           4.      Document the date, time, and results of your phone calls.     

           5.      Pay something - even a small amount - on each bill each month as a gesture of good faith.

6. Apply for Medicaid, if you are eligible, Medicaid may pay for some of your existing medical bills.
7. Go for credit counseling. Be aware, though, that some services charge high fees and do nothing to really help reduce your debt. Make sure you are working with a credit counseling service (also known as an adjustment service agency) that is licensed by the state in which you live in.
8. Be creative about finding help from outside sources.  Charitable foundations, civic organizations and churches and community groups might be able to help. The Patient Pal from the Patient Advocate Foundation includes some fundraising ideas for those with high medical bills.
9. Don't ignore bills. Though tempting, this is not a good strategy. Hospitals and providers are more likely to negotiate with you if you contact them immediately.
10. Don't transfer debt to a credit card. Most experts warn that this is a poor choice for paying off medical debt for two reasons:
1. The interest rates on your credit card will add significantly to your total payment. 
2. Transferring medical debt to a credit card may affect your eligibility for Medicaid. Some medical costs can be deducted from gross income to determine your Medicaid eligibility. Medical debt on a credit card may no longer qualify as medical debt.

Rent/Mortgage:

If you pay rent or mortgage each month the same type of actions can be taken as with the medical bills.  Here are a few strategies:

1.      Try to negotiate a payment plan with the landlord.  If you are behind with your rent, call your landlord and see what you can pay each month that will work for you and him.  This will allow you to keep up with making payments and not fall so behind while recovering from your illness.

2.      The same strategy goes for your mortgage payments.  Call your bank and plead your hardship case with them and negotiate a payment plan.  The bank may suggest a deferred payment plan, which you will have to pay off down the road.  Using this strategy of deferred payments allows you to keep your credit in good standing.  A mortgage is a very important thing to keep paying and not fall behind on, the banks are not our enemies, and they are willing and able to help. 

3.      Don’t ignore your rent/mortgage payments; this is not a good strategy.  Landlords and Banks are more likely to negotiate with you if you contact them immediately.

I hope that you have found this information helpful and try moving forward with some of these strategies.  Remember you are not alone and that when you call these institutions, you will not be the first to ask for some help.  Also, remember that the banks, landlords, hospitals, doctors and utility companies are not your ENEMIES! 

Article Excerpts from The Official Internet site of the Wisconsin Department of Health Services and Ohio Legal Services, providing legal advice to low-income Ohioans