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Don't Let An Auto Accident Wreck Your Credit: 3 Ways To Handle Medical Bills

An auto accident can put your entire life into a tailspin, including your credit rating. You may become overwhelmed with all the medical bills as they start pouring in. The demands for payment from your medical providers can be concerning. However, don't be quick to reach a settlement for a personal injury claim after an auto accident to pay the medical bills. Take the necessary time to complete the process so you can get the best compensation possible instead of accepting a low settlement. Here are a few things you can do to deal with the medical bills while you wait to receive a settlement from your case.

Ask your medical providers for a creditor's lien

A creditor's lien is a legal document that can be placed against your settlement. Essentially, this is a promise that they will wait to be paid until you receive your settlement. When your medical providers establish a creditor's lien, they will not send your bills to a collection agency for non-payment while you wait for your settlement.

Ask an auto accident lawyer to speak with your medical providers about this arrangement. At the time that your lawyer receives your settlement, he or she will be required to pay all liens that are placed against the settlement before you will receive the remaining amount. Keep in mind that your lawyer's fees will also come out of the settlement before he or she gives you the remaining amount if your lawyer works on a contingency. 

Submit the bills to your health insurance

If you have medical insurance, you can submit the medical bills to your insurance company. When a third party, such as an automobile insurance company, is responsible for payment for medical bills that have already been paid by a medical insurance company, the medical insurance company has the right to place a lien against the settlement from the third party. This is called subrogation.

Due to this right, your medical insurance company will likely call you and ask how you got your injuries. It's important to disclose the information about the accident to them. You can ask your lawyer to speak with your medical insurance company on your behalf if you don't feel comfortable doing so yourself.

If you do submit the bills to your medical insurance, you will need to pay the deductibles and co-pays out of your pocket. Keep records of these payments and show them to your lawyer.

Helpful tip: If you choose a method in which liens will be placed against your settlement, you can check on the status of the liens by going to the courthouse in your county. These records can be found in the recorder's office.

Arrange a monthly payment plan

Another option is to arrange a payment plan with your medical providers. Ask for the lowest payment possible so you can be sure you can make the required monthly payments. By doing this, you can avoid having liens placed against your settlement, which may help speed up how long it takes for you to receive the settlement after it goes to your lawyer for processing.

When you receive the settlement, then you can pay the remaining balance. But before you do, ask the medical providers if there will be penalty for paying the full amount too early.

It's important to understand that you are ultimately responsible for your medical bills since your name is on them. You don't want your wreck your credit rating by waiting to take care of medical bills until your settlement hits your bank account. Use one or all of the methods listed above to keep medical bills from going to collection agencies before you get your personal injury settlement.