Medical Debts and Credit Reporting (What You Need to Know)

Health issues come in many forms of ailments…causing one to feel the emotional stress just compounds the problems , but it’s what comes afterwards that is challenging for most; the financial obligation of unpaid bills.  It almost seems as if those medical bills reach your mailbox before you’re even able to recover, but when it comes to large or small amounts of money owed…they don’t miss a beat. Catastrophic medical events such as cancers, diseases and unexpected accidents are things many of us don’t plan for, and with the heartache comes hardships.  Financially it can become one of your biggest burdens…regardless of the medical outcome. I will share what I’ve discovered recently when it comes to medical bills and your personal credit report; it’s what everyone should know.

Tracking your credit report should be done a regular basis; as fraudulent activity has become more sophisticated than ever. Learning to spot creditors isn’t always easy, but since the Equifax scam, new rules were put in place as far as reporting medical bills. The three reporting credit agencies must now wait 180 days before putting an unpaid medical debt on your report; giving you more time with insurance claims and putting together a plan to pay it off. Often times you can consolidate medical accounts and ask for a settlement, reducing the total amount due. However, do your homework first and put it all on paper. Medical bills can definitely hurt your credit.

For those that have let bills go unpaid, it’s another story. They will appear on your credit report, but not always by the medical facility. Third parties, such as debt collectors, will attempt to collect it for them. It might show an unknown name on your report, making it more difficult to distinguish if it’s real or fraudulent. This is where it gets a bit sticky. Once you pick up their call (or vice versa) and speak with someone, they can refresh the bill (so-to-speak), as long as it’s yours and will continue to annoy you, regardless of your situation. It will remain as a negative mark on your credit report. What you need to know is debts have a statute of limitations and are known as time-barred debts. But beware, just because the old debt is past the statute of limitations, it doesn’t mean you don’t owe it, so keep a log of any communication between you and the collector. Once you’ve stopped communicating, the time (clock) starts running. Each state has a Statute of Limitations on debt. Depending on the type of debt, it can run on average about 6 years, while a few may be lower (4) and some as high as 15 years. You can check this out at https://www.thebalance.com/state-by-state-list-of-statute-of-limitations-on-debt . The statute of limitations just means they cannot come after you with a lawsuit; even if they threaten you. This is why it is so important to keep a personal log of your information. If you do decide to settle the debt, it remains on your credit report, but at least it will state that the obligation was paid; something lenders look for when inquiring about a loan or mortgage. Your credit report should be checked for accuracy every three months; possibly less depending on your individual status and, or situation.

Skip Tracing is an industry term which is used to describe the process of locating a fugitive and now commonly used to find debt dodgers. These people are like private investigators (some actually are), and will use the three credit bureau agencies to try and locate you; there’s also skip tracing software these people use within agencies. Any inquiries that don’t seem right may not always be. Read your correspondence from medical insurers, including “This is Not a Bill” statements. There may be treatments you didn’t receive or office visits you never went to; Medical Identity Theft is on the rise. If you are unsure about your bill, call the billing office immediately. Thieves are selling peoples medical files and personal data on the Black Market (Dark Web) for top dollar today. Also, your name could have been duplicated on a variety of documents, therefore making it your responsibility for someone else’s financial obligation. These types of crimes are at all-time highs, so be vigilant at viewing your reports and incoming statements and, or bills. If you are fairly healthy and don’t make many appointments, just know that you are not exempt from this type of crime; they have no conscious and know no bounds. We all need to protect ourselves.

Make your week count.

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