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The problem of medical debt in Pennsylvania

One type of obligation that can have serious financial consequences for people is medical debt incurred due to an unexpected medical problem or accident. While people may pay off the debt or settle with the medical provider or collection agency, the debt may remain on their credit report, negatively impacting their rating for years.

In some cases, a person may work out a payment plan with the provider and make payments according to it, only to have the account turned over to a collection agency by mistake. In one case reported by ABC News, that was exactly what occurred. Fortunately, an ombudsman was able to help the person by contacting the hospital directly on their behalf to have the issue fixed.

Although the proposed Medical Debt Responsibility Act seeks to solve some of the problems by mandating the removal of negative credit information regarding medical debts within 45 days after they have been paid off, the legislation has stalled in Congress. People should call the medical provider upon receiving the bill and address it immediately. They should also carefully review it to make certain the charges are accurate. The Federal Trade Commission found that 25 percent of consumers found errors on their credit reports upon reviewing them, so people should regularly check their reports from the three major credit reporting agencies, disputing any inaccurate information found.

Medical debt can quickly balloon, leaving a person who was previously financially healthy overwhelmed. Those who are simply unable to pay their unmanageable medical debt may want to consider filing for bankruptcy. Bankruptcy may provide the person with relief through a discharge of the medical debt as well as other unsecured debts. The person may, in this way, stop creditor harassment, garnishments and prevent further collection attempts.

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