House Bill 2086, the Medical Debt Responsibility Act of 2011, has been proposed in this legislative session. The bill would provide an opportunity for consumers to either pay or settle debt related to medical expenses and to have credit reports reflect the positive outcome within a forty-five (45) day period. This would make the debts appear current and/or paid on a credit report, whereas in the past, medical debts have remained on a credit report just like other consumer debt, for a period of up to seven (7) years.
There are rampant errors in medical billing and collections, which is recognized across the industry and in the credit rating arena. These issues negatively affect consumer credit scores as well as the cost of obtaining credit. Additionally, until these issues are settled, which, in the case of an accident, for example, might be years, a consumer's credit rating might be devastated. This of course, limits economic growth when lending is curtailed or made more expensive for consumers due to old, mistaken or otherwise settled medical debt. Supporters of the bill cite that medical debt is not usually related to credit-worthiness, thus it should not negatively affect borrowing capacity.
Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.
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