New rules were announced last year for the manner in which the three main credit reporting agencies (CRAs) will handle unpaid medical debts. The CRAs are still in the process of implementing the new rules, and the overhauling of their practices will reportedly continue through 2017. One of the most significant changes is the fact that consumers nationwide, including here in Ohio, will have 180 days to resolve unpaid medical debts before it will be shown on their credit reports, and before it is handed over for debt collection.
That grace period of six months will enable consumers to take steps to address any unresolved issues related to medical debt. It is not uncommon for clerical errors to occur, and each bill can be scrutinized to ensure recognition of the provider and the treatment dates. Itemized billing can be requested to check every entry if the amount seems too high. Any disputes or errors are best addressed without delay, to ensure solution within the grace period.
Incorrect insurance information on the bill may also give cause to errors, and once rectified, debts can be significantly less than recorded. Consumers are free to negotiate with medical providers to reduce the cost in exchange for a prompt settlement or for extended payment terms. Such agreements should be in writing.
However, if an Ohio consumer remains overwhelmed by medical debt and debt collection actions even after taking the appropriate steps to resolve the issues within six months, other options may need consideration. An experienced bankruptcy attorney can explain the protections that are offered under the Bankruptcy Code, and, after assessing the unique circumstances of the client, an attorney may be able to suggest an appropriate remedy. By filing for personal bankruptcy, a consumer may avoid actions such as repossessions, wage garnishment and more while also being presented the opportunity for a fresh start.
Source: lgfcu.org, "Take control of medical debt", Brenda Porter-Rockwell, Dec. 28, 2015