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Medical debt is essentially just like other unsecured debts

Typically, sources say that medical providers are reluctant to report medical debt issues to the major credit reporting agencies. But many people in Ohio who decide to file for bankruptcy have been pushed over the line to insolvency due to medical debt. Unexpected injuries, or long medical battles, can often result in large medical debts, even among those who may be insured, depending upon individual circumstances.

While medical providers do not always report medical debt to the credit bureaus, issues with the debt can ultimately find their way into the credit reports. Many medical providers will start by sending letters and making calls to a person behind on the medical bills. But in reality, medical providers are likely to send the debt to a bill collector after a period of time, if the bill is still unpaid.

Bill collectors will also try to make those phone calls and send letters to collect on the debt. But the bill collectors are also more likely to report the debt to the credit bureaus, which can have an adverse impact on a credit score, reportedly depending on the overall amount of the debt. The bill collector may also decide to sue on the debt and obtain a judgment. The bill collector then may look to seize a bank account, or garnish wages to satisfy the judgment.

Medical debt is generally considered an unsecured debt, and is dischargeable in bankruptcy. Unsecured debts, including medical debts that show as defaults in a credit report generally stay there for seven years. A bankruptcy appears for ten years. But even when a credit score is affected by defaults, a person can work to restore credit after a setback, or bankruptcy.

Cincinnati credit restoration lawyers are aware that accurate information generally cannot be removed from a credit report. But many reports include false or inaccurate information. In some cases, information that is way out of date on a credit report is mistakenly still on the report and can adversely impact the score.

Source: Business Insider, "The Truth About How Medical Debt Really Impacts Your Credit Score," John Ulzheimer, June 25, 2012

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