The cost of healthcare has grown exponentially over the years, which is why many families across the country face issues with medical debt collection. Even when you have good insurance, the policy usually doesn’t cover the full costs that come through after an accident or illness.
Some people face medical debt collection after a one-time event, such as an injury or admission to the hospital. Other people are dealing with ongoing medical bills because of chronic health concerns that require expensive treatments.
You shouldn’t have to choose between your health and financial wellness. Here are a few things you need to know if you are dealing with medical debt collection:
1. Medical Debt Can Be Removed from Your Credit Score
Just because your credit score has dropped from medical debt doesn’t mean you will always have difficulty accessing credit in the future. Most consumer debt remains on the person’s credit history for seven years before it is dropped. On the other hand, once the medical debt has been paid in full by the patient or insurance company, then it can be removed from the credit history immediately.
So, you might experience a temporary dip in your credit score. But it’s possible to bounce back quickly when that debt balance is paid off.
2. Weight of Medical Debt on Credit Scores
A variety of factors influence your credit score including the type of debt you are carrying. Consumer debt, such as credit cards, will have a bigger weight compared to medical debt. So, even though medical debt can affect your credit score, it will have a smaller impact compared to the balances you are carrying on your personal loans and credit cards.
3. Fair Debt Collection Practices
Medical debt collection must abide by similar laws used for other types of debt collection. These specific laws vary depending on the state where you are living. So, it’s important to know both the state and federal debt collection regulations to ensure that your rights are protected.
For example, a medical debt collection can’t harass you to obtain payment. The company can reach out to talk to you about the bill, but they aren’t allowed to call repeatedly or use threatening strategies to get payment.
Solutions to Avoid Debt Collection
Before you are facing medical debt collection, consider other options to pay these bills as quickly as possible. Some patients use payment plans available through personal loans or debt consolidation. Every financial situation is different, which is why you should explore the various options before determining your best strategy. A financial expert can provide personalized recommendations to help you get ahead of the balances so you can avoid medical debt collection in the upcoming months and years.
