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Helping good people through bad times

Many may receive debt relief after paying off medical bills

For some Chattanooga residents, dealing with medical bills is a difficult and grueling task. Working hard to pay off the bills may seem like an uphill battle. If one falls behind on payments, it may make any type of debt relief one seeks later that much more difficult because of the negative impact on the individual's credit score.

A new bill in the House of Representatives may bring aid to people who are struggling with that type of situation. The act, called the Medical Debt Responsibility Act of 2013 (H.R. 1767), would help people who were finally able to pay off those high bills. The way it would work is once bills are paid off in full, it would allow the debtor to remove the information from her credit report within 45 days after the bills were paid. Right now, it could take up to seven years before that information was removed.

The bills takes into consideration that medical debt is special because people cannot plan to get sick or injured, like they would for almost any other type of debt they may take on. In fact, 40 percent of adults from 19 to 64 years old had some type of medical bill problem. While the bill does not help those who have only made partial payments or unpaid claims it could still help millions of people.

For some people who are struggling to make those medical payments however, relief may be nowhere in sight. One possible solution that might benefit certain individuals is filing for bankruptcy. Filing a consumer bankruptcy, which is either a Chapter 7 or Chapter 13, is a sure way to take care of the debt. The Chapter 7 results in a discharge almost immediately, while a Chapter 13 would include a payment plan. Either, it is a way to eliminate debt.

Dealing with medical debt can be difficult for almost anyone. Seeking out assistance to deal with it is often necessary for many people with financial challenges and who want a fresh start.

Source: Our Broker, "Should Paid-Off Medical Bills Damage Credit Scores?," Peter G. Miller, April 29, 2013

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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