There are a number of different forms of debt that consumers in Cuyahoga Falls can accrue, and most are due to conscious decisions that they make with their money. However, there is one form of debt over which people often have no control: medical debt. Medical emergencies can’t be planned for, and the expenses associated with them are out of a person’s control. One should never be in the position of feeling that he or she needs to refuse necessary medical care for himself or herself or members of his or her family because of concerns about not being able to foot the bill.
Because of this, some lenders actually ignore outstanding medical debts on one’s credit report when considering his or her credit worthiness. There has even been a push by consumer advocates in recent years to exclude medical debts from credit reports altogether, saying that these debts don’t accurately reflect a consumer’s financial responsibility. One may never miss a payment on a credit card or a loan, yet suddenly be saddled with enormous medical expenses leading to unmanageable debt. This thought seems to be backed up by research from the Federal Reserve, which reports that 1 in 6 credit reports lists a medical bill in debt collection.
The complaints of these consumer advocates have been heard, as the newest VantageScore model used for credit reporting won’t count medical collections accounts that have been paid, and will only report those outstanding medical bills reported by a collection agency.
Outstanding medical debt is one of the main reasons why people are often forced into the position of filing for personal bankruptcy. Anyone drowning in medical debt and in need if initiating a personal bankruptcy may wish to speak with a bankruptcy attorney.
Source: Fox Business “How Medical Debt Affects Your Credit Score” Janna Herron, Oct. 16, 2013