Research published in 2019 found that 66.5% of personal bankruptcies filed in New York and elsewhere that year were related to medical debt. According to a TD Ameritrade report, paying off medical debt is the top reason why individuals want to withdraw money from their 401(k) retirement accounts. However, if you are struggling to repay medical debt, it may be possible to pay a balance down without having to sacrifice your future.

Negotiate with your care provider

There is a good chance that the hospital where you had surgery or received other treatment offers charity services. Your care provider may also be willing to forgive some or all of your outstanding medical debt. In lieu of debt forgiveness, you could ask to make small payments each month until your balance has been repaid in full. In most cases, hospitals and medical practices won’t pursue legal action against those who are making good faith efforts to pay what they owe.

Consider the risks of borrowing money

Taking out a home equity loan, putting bills on a credit card or borrowing against funds in a retirement account may allow you to pay off medical debts quickly. However, it could put you at risk of losing your home or paying interest rates of up to 29.99%. It is worth noting that many hospitals or care providers won’t charge interest if you arrange to make payments over time.

If you take money out of a retirement account, you will likely need to pay income taxes on the amount that was withdrawn. If you’re under 59 1/2, you will likely need to pay a 10% early withdrawal penalty. An exception may be made if your medical bills are more than 7.5% of your adjusted gross income.

An attorney may be able to talk more about your options to obtain debt relief such as filing for bankruptcy or asking for debt forgiveness. Filing for bankruptcy may allow you to discharge medical debts without having to relinquish assets.