High levels of unmanageable debt can be challenging for many Oregonians. Such situations can arise from temporary unemployment, medical expenses that are incurred from an unexpected medical condition or other factors that can happen to anyone, anytime. Even if all medical debt or other debt is sufficiently paid back, consumers can still be plagued by the effects of the debt for some time to come. Some consumers may not even be aware of such problems.

The Federal Reserve Board indicates that more than half of all collections activity noted on American consumer credit reports relate to hospital bills or other medical expenses. A large amount of those reportings are made by third-party collection agencies. At the same time, it is identified that third-party collection agencies can often inaccurately report consumer debt issues.

According to a recent study conducted by the Consumer Financial Protection Bureau, many Americans may be deemed unworthy of the credit they may truly deserve because of current or past medical debt. This was the conclusion after reviewing consumer records from September 2011 and September 2013 that involved the review of over five million consumer records. Credit bureaus do not differentiate between medical and other debt and the medical debt can often lead to a drop in credit scores by as much as 22 points for an individual consumer.

Consumers who have worked hard on debt elimination but still face challenges because of credit report practices may wish to talk to an attorney. Getting help with credit clean up or inaccurate reportings may be very beneficial.

Source: Consumerist.com, “Credit Bureaus Are Over-Penalizing Consumers With Medical Debt,” Ashlee Kieler, May 20, 2014