Medical Debt is one of the top reasons an individual may consider filing bankruptcy. With the cost of health care being so high, even people with health insurance are finding it hard to pay the balances they owe after the insurance discount and payments.
When a debtor decides to file bankruptcy, we pull a credit report from all 3 of the major credit reporting agencies to make sure we disclose all of the debtor’s debts including old medical bills. Prior to now, the agencies, which are Equifax, Experian, and TransUnion, had no uniform threshold amount when deciding whether to report medical bills so we always mention to clients to check their reports and look for any missing medical bills in the reports.
Now, we have some new guidance on what Equifax, Experian, and TransUnion will disclose on the reports. In 2022, the agencies collectively decided to set parameters on their reporting of old medical debt. Effective March 20, 2023 medical debt accounts under $500.00 will no longer be included on consumer credit reports. Also, in June 2022 Experian and in July 2022 Equifax and Transunion announced they will no longer include paid medical debt collections on their reports and will only include unpaid medical debt that is 1 year old or older. Previously, the agencies would report unpaid medical debt collections that were 6 months or older.
What does this mean for consumers? Overall, this is good news for consumers and their credit scores. Not only is there clear guidance on what will or will not be included in the reports but credit scores will be aided by the accounts not disclosed due to the $500 threshold and the age of the debt being increased from 6 months to 1 year.
It’s important for consumers to have clear guidance from these agencies since their credit reports are used in so many scenarios including for bankruptcy disclosures. If you are looking to file bankruptcy, please keep medical bill statements so we can make sure to include those bills that are less than $500 and under 1 year old on your bankruptcy petition.
If you are interested in discharging your unpaid medical bills, please do not hesitate to contact Printy Law Firm for a free consultation. We offer consultations over the phone and via Zoom now for your convenience!