Credit reports and medical debt: material rule changes announced

On behalf of The Rollins Law Firm posted in Debt Relief on Wednesday, March 25, 2015.

Americans are anything but a monolithic bunch, with ample evidence forthcoming daily – from street demonstrations, polling results, fiery congressional debates and other sources – indicating that the spectrum of viewpoints on almost any subject is wide, indeed.

Put another way: In these fast-paced and complex times, it might sometimes seem that there is virtually nothing that a strong majority of people across the country can agree on.

Here's a likely exception, though: medical care.

Specifically, the cost of care. It's hardly an anecdotal observation to suggest that many people in Mississippi and nationally struggle with high medical bills. In fact, empirical evidence abounds showing that many millions of individuals and families are being sorely challenged – often to the point of bankruptcy – by billing exactions that they simply cannot pay.

And adding insult to injury for many consumers is the funneling of their billing accounts to credit collection agencies by hospital billing offices, which adds a whole new dimension of horror for many debtors.

Here's a telling and altogether lamentable statistic: According to the Consumer Financial Protection Bureau, well more than 40 million Americans show past-due medical bill entries on their credit reports.

New federal rules were recently announced to deal with that lofty concern and to better protect consumers. They centrally include these measures:

  • Consumers with payments in arrears will now be given a 180-day grace period before a collection agency can forward adverse information to a reporting agency (historically, collectors acted much quicker than that)
  • Paid past-due debt information will no longer remain in credit reports, as it has in the past for up to seven years or more

Such changes seem clearly salutary and even long overdue, especially given that slow processing times for hospital billers and insurers are often prime catalysts for delayed consumer payments.

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