Did you know that half of all negative marks on credit reports are related to medical expenses? For 15 million Americans, unpaid medical bills are the only negative marks on their credit reports. This problem has become worse as more Americans purchase insurance policies with high deductibles. However, recent changes to how the three credit agencies will report these blemishes could improve your credit score.
Starting on September 15th, Equifax, TransUnion and Experian will wait for 180 days before adding unpaid medical bills to your credit report. At the moment, your medical bills may be reported to the credit bureaus after 30 to 120 days of nonpayment. This new waiting period will give you time to resolve disputes with your insurance company. If a hospital or doctor’s office sends you to collections, the three credit bureaus will remove the debt from your credit report once it is paid by your insurer.
What If I Already Have Unpaid Medical Bills?
If you have unaffordable medical bills that insurance will not cover, then you may discover that a lower credit score is the least of your problems. Depending on the state you reside in, creditors may seek judgments to garnish your wages. In Missouri, creditors can take 10 to 25 percent of your disposable income.
You can discharge medical debt in bankruptcy. Medical bills are treated as nonpriority unsecured debts. Filing for bankruptcy may be a good option if you are currently experiencing a wage garnishment or other problems caused by past due medical bills.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help you learn of possible debt relief options for unpaid medical bills.