How Much Will Medical Debt Collectors Settle For?

Posted by NSB Staff on Nov 30, 2020 5:06:27 PM


Did your medical bill sit for too long, and now it is overdue? It likely has even crossed over into collections and turned into medical debt. When you do not think you can pay the expenses, you might make a settlement on part of it.

Debt settlement can stop collectors from bothering you and relieve you of your debts. There are some things that you need to know first. We are covering everything that you need to know in this article.

Let's get started.

What to do First

Before you settle your medical debt, you will need to know if it is in collections. You can only settle if it is already in the hands of a medical debt collector.

However, it is essential to try to keep it from getting to that point. You should take these steps to avoid your debt going into collections:

  • Review your bill and ensure it is correct
  • Ask about a payment plan
  • Negotiate the invoice with your health care provider
    • Try to get a play based on your income

How Medical Debt Settlement Works

Medical debt settlement works the same way as other kinds of debt settlement. You have to make a formal agreement with the collector on how much you need to pay. Of course, this should be less than what you owe.

Going through this process comes with some benefits and downsides. We will cover them briefly here.

Benefits of Medical Debt Settlements

The most important benefit is that you get rid of your medical debt quickly. When you are going through hard times financially, you know how essential that can be. Plus, on average, people will pay 48% of what they owe- which is a little less than half.

Overall, settling is not as expensive as filing bankruptcy. There are plenty of reasons that a person would prefer to settle over letting their debt run on.

Down Sides of Medical Debt Settlements

When you settle medical debt, it will become a negative record on your credit score. On top of that, it will be there for seven more years. However, after that time is up, it will be removed entirely.

If you are going to settle, you need to be prepared to take some credit score damage. It is pretty much unavoidable at this point.

You will want to keep an eye out for scams. There are too many people out there who want to take advantage of people in medical debt.

How to Make a Settlement

First, you need to make sure that your debt is still open under your state's statute of limitations. This time frame means that a collector could even sue you over what you owe.

If you are still in the statute of limitations, you can start negotiating. You will go back and forth with the collector on what percentage you still need to owe. It begins by sending them a rate you feel that you can pay, then they respond with what they can accept (which is often higher than you might like).

From there, you can continue sending them negotiations until you both find a number you are comfortable with. On average, this is about 48% of your original medical debts.

You can work with a debt settlement company if you do not want to handle this process independently. This is the better option if you have many medical debts you wish to settle at once.

When you have decided on what to pay, you will need to sign an agreement with your collector. From there, you will be responsible for paying on time. If you do not, your credit score is going to get hurt. Plus, the collector may sue you.

How Much They Settle For

The actual amount a debt collector will settle for will be on a case by case basis. However, they are often more likely to settle if you offer them a lump sum payment rather than making payments over time.

You can use that to your advantage to get out of debt faster. Try to save at least 25% of your debt, then offer it as payment. The debt collectors might be more willing to accept if they know that they can fulfill the debt right away.


On average, you can expect your debt collector to settle for 48% of your total medical debts. Working with an agency can help you get a better deal than if you try to negotiate alone.


Topics: Medical Collections