Your present health conditions can also facilitate writing off your debts if only you know how to go about it. As per the guidelines of the industry, there are specific rules set and different codes of practices formulated regarding this matter. These guidelines say that all creditors need to consider the present health conditions of the borrowers and may even have to write off debts according to the mental health evidence provided by them.
There are different medical conditions that may result in writing off of debt includes:
- If you are very unwell at present
- If you are unlikely to recover from your medical conditions in the near future and
- If you really do not have any useful resources, assets or savings to repay your debts.
However, proving these medical conditions is not easy at all. You will need a lot of evidence and proofs to provide which must be strong enough to make the creditors forego the amount that they legally owe from you.
Make a request in writing
All these requests for writing off debts due to severe medical conditions should be made in writing along with proper and adequate medical evidence to substantiate your claims. Such medical evidence can be prepared by a few specific people such as:
- You general physician
- The psychiatrist treating you or
- Any other health professional.
This letter to request your creditor for a write off must include all the relevant and necessary information regarding your medical situation. This should include:
- The time for which you are unwell and under treatment
- The details of any hospital stay that were required recently
- The condition of your health when you took on the loan
- The recent changes that you have experienced in the circumstances and in your symptoms
- The way in which this condition has affected your ability to repay and
- The ways in which your debt stress and condition has affected your mental health.
The medical condition may affect your working ability reducing it significantly as well as so as to result in less money coming in or even becoming unwell recently.
When you have got these evidence ready you must also prepare a proper budget that will show all your income and expenses in a sheet. This should be strategically prepared by a professional or with the help of the professional budgeting tools available on the internet. This budget should typically show that you are really unable to repay your debts even if you consider consolidating your debts or choose any other options such as filing for bankruptcy or debt settlement after reading the debt settlement reviews and ratings.
The key facts
When you opt for writing off your debts for medical reasons there are a few key facts to know. Not all creditors will agree to write off debts. Some may but there may be many creditors who will instead agree to mark off your debt as ‘non-collectible’.
- When your debt is termed as non-collectible few creditors may not contact you asking for a repayment till the time your health improves
- There may be other creditors who will remain in touch and contact you every now and then just to find out your physical health and financial situation and
- There may be some who will never contact you at all if your debt is termed as non-collectible.
When it comes to the amount of debt to qualify for such privilege you must know that there is no minimum or maximum amount requirement for this kind of an exception to debt collection. However, when it comes to the type of debt, this option is usually provided to medical patients having credit debts. All these debts will be cleared from your credit report right at the time when these are written off.
It is also necessary to know at this point that the creditors may not agree to provide such option to you right at the first attempt made by you. In such situations, you will need to send another ample letter along with the necessary proofs asking them to reconsider your situation and their decision once again.
The pros and cons
Just like any other options, there are also a few significant and characteristic pros and cons of asking creditors to write off your debt.
The advantages of it include:
- It will relieve you from any further stress and anxiety and thereby pull out from an extremely difficult situation and
- It will provide you with an opportunity to make a fresh start
On the other hand, the disadvantages of creditors accepting the fact that it is not appropriate to take any further debt collection action because of your medical and mental situation, if at all they do are:
- It will reflect in your credit history and affect your future borrowing ability and
- Few creditors may not put it in writing that they will not push you any further for collecting their dues thereby providing you with no guaranteed mental peace
However, since there is no legal compulsion to the creditors to accept a request for a write off of debt due to mental health conditions, you will have to make sure that you meet with all their needs.
- Apart from the evidence in the form of a medical report and a budget sheet, your creditors may also ask for a Debt and Mental Health evidence form.
- Moreover, you should be mentally prepared to face a long process and that too without any guarantee of success.
In fact, it is found that filing for bankruptcy or getting a debt relief order takes much less time than getting your debts written off due to medical conditions.
Summing it up
You will need to submit The Debt and Mental Health Evidence Form or DMHEF as a standard operation procedure of getting your debts written off due to health reasons. You may need to take the help from a health and social care professional. This form is specifically designed to make the process much easier for collecting all the necessary facts and information by the creditors from you.