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Defaulted medical debt relief for South Carolina patients

The three major credit reporting bureaus came to an agreement to extend the amount of time it takes for unpaid medical bills to show upon on consumer credit reports. It is easy to accrue tens of thousands of dollars in hospital expenses during a single major illness. Even insured South Carolina patients may be overwhelmed by the amount of benefits explanations from their healthcare providers.

A 2015 settlement between the New York attorney general and Equifax, TransUnion and Experian may simplify things for healthcare consumers, both insured and uninsured. The three major credit reporting agencies have agreed to delay medical bill reporting for 180 days after an unpaid bill is reported to collections. Most bills are not considered in default until they have remained unpaid for at least 60 days. The medical debt may be cleared from the consumer's credit report entirely if an insurer later pays the bill.

Medical bills are often a unique blemish on otherwise clean credit reports. The Consumer Financial Protection Bureau conducted a study showing that medical bill collections are not always predictive of a consumer's trustworthiness as a credit recipient. The 2015 changes to help those with medical debt will be gradually applied until all new rules have taken effect by June 8, 2018. In addition to the credit bureau changes, the latest version of the FICO score puts little emphasis on defaulted medical debts and ignores collection accounts that have been paid.

While new consumer friendly changes to the medical debt reporting process may take a while to positively affect patients, chapter 7 bankruptcy and debt relief programs remain viable options. A bankruptcy attorney may be able to help those with significant medical debt determine the best way to resolve unpaid accounts. From emergency medical bills to disputed accounts, changes in the medical debt reporting industry are gradual but positive overall.

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The Huggins Law Firm, PA

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