The Attorneys Of Stewart Sorice Farrell Finoli And Cavanaugh LLC

Is medical debt treated differently from other debt?

On Behalf of | Jun 2, 2022 | Uncategorized |

Anyone struggling with debt knows that late payments can show up on your credit reports after 30 days. Most creditors, other than credit card companies, are not so quick to send items to your credit report, but they can. However, medical debt is treated differently, and soon, it will be treated even more differently.

Paid medical debt vs. paid other debt

Delinquent debts normally stay on credit reports for approximately 7 years, even after those debts are paid off. However, beginning this summer, paid off medical debt will begin to automatically be taken off of the three largest credit bureaus: TransUnion, Equifax and Experian. Each has agreed to remove paid-in-full debts in July. According to the Consumer Financial Protection Bureau, this amounts to about $90 billion and 70% of negative medical debt reported on those three credit bureaus consumer credit reports, according to them.

Unpaid medical debt vs. normal debt

Beginning in 2017, medical debt had to be delinquent for at least 6 months before being reported to the credit bureaus. Later this year, that term will be extended to 1 year.

Debt limits

For normal, nonmedical debts, there is no minimum amount of debt that can be reported. Indeed, some consumers have seen negative credit marks for amounts less than a few dollars and even less than a dollar. Beginning in 2023 though, Equifax, Experian and TransUnion will not report any medical debt under $500.


Unfortunately, these changes will not affect ongoing medical debt lawsuits or the ability of medical providers or debt collectors to file lawsuits over medical debt. In fact, according to a ProPublica report, between 2018 and 2020, there were nearly 40,000 lawsuits filed to collect consumer medical debt.

The takeaway

For our Greensburg, Pennsylvania, readers with paid-off medical debt and with medical debts under $500, this comes as great news. But, for those who owe more and have unpaid medical debt, while their credit scores may last longer, they will still owe those debts.

Call the medical providers to negotiate down the amount owed, but if that is not possible or still not affordable, bankruptcy is an option. It will stop all lawsuits and provide a fresh financial start for those drowning in debt.