Eugene Bankruptcy Law Blog

Lots of Oregon residents are struggling with debts they are unable to repay. While personal bankruptcy may provide an option for debt relief, many are wary of taking the hit to their credit reports that come with the option. However, these debtors may still begin to suffer serious credit damage, especially if late payments or unpaid bills begin to rack up. This means that debt-resolving bankruptcy can actually improve some people's credit scores in the long run.

The impact of bankruptcy on a credit score varies and changes over time. While a Chapter 7 bankruptcy remains on a person's credit report for 10 years, a Chapter 13 bankruptcy, which involves structured repayments, remains on a credit report for seven years. People suffering from the worst credit issues, including large unpaid bills and extensive late payments, may even find that the impact of a bankruptcy raises their credit score instantly, even if it keeps them in a lower credit bracket. In any case, a debtor can work to rebuild their credit scores after bankruptcy and get back on the path to a solid credit rating.

Collection agencies sometimes cross the line into harassment when they contact debtors in Oregon. Abusive language, threats or excessive telephone calls and texts can add significantly to the stress of people who have fallen behind on payments. The Fair Debt Collection Practices Act recognizes that people might need protection from creditor harassment and establishes restrictions on the actions of debt collectors.

This law applies to collection agencies, debt buyers and lawyers but not to original creditors, such as a hospital that issued the bill. Third-party collectors for car loans, medical bills, home loans or credit cards must adhere to the law that forbids unfair and deceptive collection practices. They must restrict telephone calls to between 8 a.m. and 9 p.m. Debtors do not have to tolerate calls at their places of employment, and creditors cannot discuss people's debts with their friends or relatives except for spouses.

Patients in Oregon and across the U.S. are getting slapped with surprise medical bills despite staying within their health care network, according to an analysis by the Health Care Cost Institute. In fact, the report found that approximately 1 in 7 patients nationwide get an unexpected medical bill after seeking in-network medical care.

For the analysis, researchers examined almost 620,000 in-network inpatient admissions and subsequent claims in the District of Columbia and 37 states. They found that Minnesota had the lowest share of in-network hospital admissions that included one or more out-of-network claims, with 1.7 percent. Meanwhile, Florida had the highest share, with 26.3 percent. Oregon had a share of 4 percent. Of the various claim types, anesthesiology had the largest share of surprise out-of-network claims after in-network care, with 16.5 percent. Meanwhile, 22.1 percent of independent labs billed out of network.

Young people in Oregon and across the country are facing an increasing debt burden. According to statistics from the New York Fed Consumer Credit Panel and Equifax, people between the ages of 18 and 29 owe $1.05 trillion in debt. While student loans comprise a substantial amount of this debt, other common burdens include credit card debt, auto loans, mortgages and other types of loans or consumer credit. This marks an increase in debt among this demographic, which last owed this much money in the last quarter of 2007. The trend at that time was later disrupted by the 2008 financial crisis.

Of course, young people are not alone. People between the ages of 30 and 39 owe $2.9 trillion in debt while people aged 40 to 49 owe $3.4 trillion in debt. People between 50 and 59 years of age owe $3.2 trillion, those 60 through 69 owe $2 trillion, and those 70 and up owe $1 trillion in debt. This means that the youngest and oldest Americans have approximately the same collective debt burden. Student loan debt, which has been widely recognized as a national crisis, amounts to $1.5 trillion of all personal debt, affecting 44 million people. Some expect that 40 percent of borrowers may default by 2023.