Thomas F. Miles, Attorney and Counselor at Law
Call Today! 619-631-4833 Toll-Free 866-471-0416

Medical debt reporting changes can assist with unmanageable debt

Medical debts have adversely impacted the credit scores of many California residents. Last year, the Consumer Financial Protection Bureau reported that many consumers have unmanageable debt purely due to unpaid medical bills. Many of these consumers pay their other debts as regularly as consumers with high credit scores. Fortunately, changes to medical debt reporting were announced earlier this year that may benefit the credit scores of those with medical debt.

The benefits provided under the new scoring system include more time to pay medical debt before it is handed over for collection. It will not be reported to credit bureaus for 180 days. Also, once payments on a reported debt start, or if the account is settled by the debtor or insurance provider, it will be removed from the individual's credit report. This is in contrast to other debts that remain listed for seven years, even after they have been paid off.

These benefits can have a significant positive impact on a person's credit score. Last year, FICO -- the credit scoring system that is most widely used in the United States -- announced that medical debts that have been referred for collection will have less of an impact on an individual's overall credit score. Also, once bills are settled, late payments will no longer be factored into determining credit scores. It was said that these benefits can have an immediate positive effect of about 25 additional points on a person's credit score.

These changes will surely have a positive impact for those California consumers struggling with medical debt. Nevertheless, many individuals continue to suffer under the weight of medical bills that they simply do not have the means to pay. Fortunately, there are several options designed to help consumers overcome unmanageable debt. A consultation with an experienced bankruptcy attorney may prove beneficial in resolving debt issues and achieving financial security once again.

Source:, "Medical Debt and Your Credit -- What You Need to Know", Jeremy Marcus, Dec. 22, 2015

No Comments

Leave a comment
Comment Information


Thomas F. Miles, Attorney and Counselor at Law
152 West Park Ave
El Cajon, CA 92020

Map & Directions