What should I do now that medical debt is treated differently?

On Behalf of | Aug 9, 2022 | Bankruptcy |

This blog regularly posts about medical debt and bankruptcy. And, we have posted on the changing treatment of medical debt in the past. But, now that the new Greensburg, Pennsylvania, medical debt policies have been enacted, do you need to do anything?

The policy changes

As we discussed in our prior post, starting July 1, everyone with medical debt that they paid off or settled will see that it is now gone from their credit reports. They should also notice that any medical debt that has been reported on their credit bureau that is not at least 12 months old also dropped off. This, in turn, likely raised their credit score. And, starting in 2023, all medical debt under $500 will also drop off everyone’s medical debt.

What do I do now?

The first thing you should do is check your credit report to make sure that your credit reports reflect these new policy changes. According to Equifax, Experian and TransUnion, the new policy changes will occur automatically, but you should still check to make sure it actually occurred.

What do these policies mean for those with unpaid medical debt?

Unfortunately, not much. While medical debt may not show up on your Greensburg, Pennsylvania, credit report for 12 months, that does not mean that the medical provider has to wait to start collection efforts. You could begin receiving harassing phone calls immediately after 30 days, and those could escalate as time goes on. Plus, nothing stops these medical providers from suing their patients for outstanding medical debt.

What should these people do?

Generally, medical providers try to avoid suing their patients as it is not a great long-term strategy to keep customers nor get new ones. Headlines about suing cancer patients and survivors is not great publicity. However, this does not mean they will not do it. But, with the hold on medical debt reporting and the bad PR suing patients brings, you may be able to negotiate your medical debt down to an affordable monthly plan or lump-sum payment.

If that is just simply not possible, then bankruptcy may be an option as well. It can eliminate Greensburg, Pennsylvania, medical and other debt, while still allowing you to keep your home, car and most of your personal items. It all depends on your personal financial situation, though.

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