If you have ever had a lengthy hospital stay or illness you know that gargantuan hospital bills can rack up very quickly. Unsecured Medical Debt in America is a hot topic, and why wouldn’t it? Half of all the debt that appears on credit reports is connected to medical debt, and over 43 million Americans are carrying crushing medical debt. In Q3 of 2017 the three major credit reporting agencies – Equifax, TransUnion, and Experian are changing the way they report Medical Debt to your credit report, and it appears that it’s in the debtor’s favor. The changes will give some reprieve, and a little extra time, to pay your medical bills.

The change in how medical debt is reported to credit agencies will involve the big three agencies setting a 180 day waiting period before the medical debt hits your credit report, giving you half a year to pay the bills or make other arrangements before the medical debt starts to negatively affect your credit. The real reason for the change is to allow for disputes with insurers and to compensate for any delays in payment. Once the medical debt is paid by an insurer the credit bureaus will remove it from your credit report.

Traditionally, there hasn’t been much of a standard in the way of hospital’s collection activities, and you might get sent to collections for your medical debt going unpaid for 30, 60, or 90 days. The benefit then of the proposed bill is that the rule is nationwide and will keep more medical debt from going into collections. These changes derived from a 2015 consumer protection settlement between New York and the reporting agencies.

While this rule may not fix the issue of medical debt across the board, it should certainly be viewed as a step in the right direction. Being injured or sick is bad enough on its own without the worry of crippling debt and destroyed credit. If you are carrying a medical debt that you are unable to pay, then you should contact your local bankruptcy attorney to rectify the problem. A qualified Auburn bankruptcy attorney can assess your situation, finances, and debt and recommend debt relief options including having your medical debt discharged or setting up a payment plan to payback some or all of the debt.

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