Medical Debt on Your Credit Report - Total Bankruptcy
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Medical Debt on Credit Report

Bad credit can cripple a person’s ability to perform basic life tasks, such as securing a job or getting a loan to buy a car. Unfortunately, even bills for the necessities, such as medical care, can wreak havoc on your credit report.

If medical bills are unpaid, even if you have insurance, they could be sent to a collection agency and negatively affect your credit score. In order to mitigate the negative effects of medical debt, many individuals have filed for personal bankruptcy. Filing bankruptcy may help you eliminate your medical bills and give you a chance to begin rebuilding your credit score.

To learn more about reducing the effects of medical debt on your credit report, fill out the form below. You can get a free, no-hassle consultation with a local bankruptcy lawyer.

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Medical Debt’s Effect on a Credit Report

If you have been unable to pay all your doctors’ bills, your doctor or a hired collection agency may report your medical debt to a credit reporting agency. Even if your unpaid bill is a result of an insurance mix-up, your debt may still be reported and your score still affected.

In the eyes of credit agencies, you are ultimately responsible for medical payments, not your insurance company. So, it is important to conduct an annual check-up of your credit report.

If medical debt does appear on your credit report, you have a few options. These include:

  • Pay the bill. This won’t remove the debt from your credit report, but it should make your report appear much healthier. If this is an unreasonable option, consider the next few steps.
  • Dispute it. If your report contains an obvious error, you may be able to dispute the report and explain why that debt should be removed.
  • Tackle your debt through bankruptcy. This won’t immediately fix your credit report as a bankruptcy can remain on your credit report for up to 10 years, but eliminating your debt may allow you to regain your financial health and ultimately improve your credit.

Remember, there is no shame associated with bankruptcy. With the costs of medical care seemingly rising at an exponential rate, many Americans have turned to bankruptcy to help eliminate medical debt.

Eliminating Medical Debt Through Bankruptcy

By filing for Chapter 7, you may be able to eliminate some or all of your unsecured debts, including medical bills. Chapter 7, though, is reserved for people with limited income.

If you have a steady source of income, a better option may be Chapter 13 bankruptcy. Through Chapter 13, you’ll have a chance to reorganize your debts into a more reasonable payment plan.

If medical debt is harming your credit report, eliminating your medical bills through bankruptcy may be the first step towards improving your credit. While bankruptcy does not immediately help your credit and it will remain on your credit report for a while, it may lay the foundation for future financial health.

To learn more about medical debt and your credit report, contact a lawyer today.

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