Distressed healthcare financing (DHF) is defined as the out of pocket (OOP) healthcare payment financed through borrowings or sale of household assets. Aim: To assess the mode of payment and its effect on the finances and healthcare seeking behavior among migrant labourers. Methodology: A cross sectional study was conducted among 150 migrant labourers in urban Bengaluru, Karnataka; through an interviewer–administered questionnaire. Data was analyzed using SPSS version 23.0. Chi square test was used for associations. Results: All the labourers paid for the excessive medical bills from savings (25%), borrowings (95%), selling jewellery (93%) and borrowing from relatives (7%). 82% of the participants were BPL card holders. The effect of DHF on buying of medicines was that 80% of the labourers either bought half the prescribed medicines or none at all. Conclusion: Healthcare expenses are a huge burden on the migrant labourers of Bengaluru. There is a need for increasing awareness on the government healthcare financing schemes for BPL cardholders