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Will Congress change credit reporting rules for medical debt? P. 1

Several years ago, an Ohio State student asked her lawmaker if the federal government could do something about how medical debts are recorded in a credit report. The woman suffered from fatigue and her doctor ordered a sleep study. Apparently, her medical insurance later refused to cover the medical bill, and the Ohio resident was saddled with bad credit from the medical debt.

For some time, she had difficulties keeping up with payments on the original debt. Her medical bill reached her credit report after it was sent to a bill collector. Since that time, she has been able to pay-off the medical debt without having to file for bankruptcy, according to the Columbus Dispatch. Yet the debt remains on her credit report, and will until 2013, causing her credit score to suffer.

Cincinnati credit restoration lawyers are aware that not all information can be extracted from a credit report. In fact, there are limited types of information that can be cleared from the reporting agencies, such as false and outdated materials. A bill related to medical debt to change those rules has been bouncing around in Congress for a number of years. Lawmakers introduced a measure in 2009, but it was defeated. The bill was reintroduced in 2011, and is in committee hearings still.

How bad is medical debt for American consumers? Sources say that an estimated 40 percent of Americans are hounded by bill collectors over medical debt. Bankruptcy lawyers have long known that medical debt is often unforeseeable, and consumers often seek bankruptcy protection to find relief from medical debt.

In the next entry, this blog will continue discussing the issue of medical debt and the credit reporting agencies, including a discussion of what opponents and proponents of the measure have to say.

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