Unhealthy Credit Scores

The Consumer Financial Protection Bureau released a report analyzing the effect of medical bills on credit scores. Findings show unpaid medical bills carry the same weight as unpaid rent when calculating scores. Medical debt and credit scores

Many people do not realize they owe medical bills. After a hospital stay or doctor’s visit, it’s easy to assume insurance covers 100% of the cost. If unpaid, a bill can go to collections and start negatively affecting a credit score.

Debt is reported to credit bureaus in two ways – from the original creditor (i.e. doctor, hospital) or from a collection agency. Majority (close to 99.4% according to Consumer Financial Protection Bureau) is reported by collection agencies.

Most medical bills are caused by expensive and unexpected procedures – i.e. emergency surgeries, hospital stays, and emergency room visits. Insurance may pay part but not the entire bill. You could easily find yourself owing thousands for an emergency room visit.

Bankruptcy is an option. If you have a tremendous amount of medical bills, filing a bankruptcy will alleviate the stress that comes with owing. I spoke with a man from Illinois who was diagnosed as a diabetic. He was uninsured and spent three days in the hospital. In the end, the bills amounted to over $80,000.  Without a bankruptcy option, he would spend the rest of his life trying to pay down a three day visit.

Author: Elizabeth Doren Paralegal at Geraci Law L.L.C.

I am a paralegal at Geraci Law L.L.C. (the greatest consumer bankruptcy law firm that ever was or will be!) I talk to thousands of people who are struggling financially. They call because they know Peter Francis Geraci and Geraci Law staff help people through very difficult times. I write about the things I read in the news, hear from clients and general information about debt and bankruptcy I find interesting.