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Overwhelming debt from medical bills can affect credit score

It is important to stay healthy, since a trip to the doctor or a hospital can be a significant and unforeseen financial burden. This has caused many people to be faced with overwhelming debt problems as well as decreased financial stability. However, along with looming medical bills, many people in Texas will find that medical debt can be detrimental to one’s credit score.

Part of the problem is that many people are unaware of the medical debt they owe until it has already been reported on their credit reports. This is what one 67-year-old man found out recently when he realized he owed $640 in unpaid medical debt, which had been sent to collections as well as reported to credit bureaus. The man found this out when he attempted to apply for a credit card offering a zero-percent interest rate. He was planning on transferring balances from his other credit card accounts when the man’s application for the new credit card was turned down.

On the other hand, lawmakers are aware of problems like these pertaining to medical debts. This is why some lawmakers are backing a proposed law known as the Medical Debt Responsibility Act. This proposed legislation would require bill collectors, within 45 days of medical debt being settled or paid off, to remove the debt from one’s credit report. However, lawmakers have not moved quickly in passing the law, which had been introduced in April 2013 and has not moved from the House Committee on Financial Services ever since its introduction.

While lawmakers remain somewhat sluggish in acting on this issue, many consumers in Texas are being faced with overwhelming debt that continues to negatively affect their credit scores. This can quickly become a serious problem as bills, interest charges and late fees continue to pile up. Some people may find filing a personal bankruptcy to be the best choice in obtaining relief from debt.

Source: Pittsburgh Post-Gazette, "Medical debt can have long-term consequences", Tim Grant, June 11, 2014

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