For some people, medical bills are a primary derogatory mark on their credit report because they were in collections. Those medical bills often pushed people to file for bankruptcy so they could get a fresh financial start.
Starting in July, Equifax, Experian, and TransUnion are removing around 70% of medical debt from credit reports. There are many changes that are coming regarding medical bills and how they interact with a credit score. This could indirectly impact the number of people who feel the need to file bankruptcy because they won’t have to worry as much about how their inability to pay large sums of money on medical bills will impact their credit score.
How is medical bill reporting changing?
In the past, medical debts that weren’t paid could be reported after 6 months. That time is increasing to a year. Additionally, the three major credit bureaus are also removing unpaid medical collection accounts from credit reports if the amount is less than $500.
Most consumers want to pay the bills they owe, but essential bills like mortgages or rent, utilities, and food are a priority. Because of that, medical bills sometimes fall by the wayside. Getting medical care is expensive for many people in this country, but those services are vital so not being able to pay them off quickly shouldn’t be held against anyone.
Some consumers have medical bills that are simply insurmountable. Filing bankruptcy remains a way that they can get on top of those bills. Making sure that you understand your rights and how bankruptcy will affect you is imperative. You should also ensure you know your responsibilities. This is your chance to get a fresh financial start.