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The Effects of Medical Debt on Credit

Texas residents may wonder how unpaid medical bills might affect their credit. Some experts advise that if medical bills are in dispute, it is best to pay them off first and carry on with the dispute in order to avoid a lower credit score.

Medical expenses represent a large proportion of all collections, but there is increasing recognition that these types of debts do not necessarily indicate that a person is a bad credit risk. Medical debt often occurs due to a catastrophic event rather than a person failing to accurately estimate their ability to repay a loan. Furthermore, many medical bills are inaccurate. They might be due to an overcharge, or they might be for things an insurance company should repay.

Over one-third of medical debts that collectors deal with are for amounts under $100, and FICO is no longer taking such small amounts into consideration. However, experts still advise individuals to take steps to protect themselves. It is important to keep an eye on charges to make sure that they are accurate. Communication with insurance companies and medical providers can also sometimes help keep a charge from being sent to collections.

Medical debt is one of the most common reasons individuals file for bankruptcy, and individuals who feel overwhelmed by their debt may wish to seek the advcie of an attorney. With a consultation, an attorney may be able to determine whether bankruptcy is a good option. Individuals may have heard that bankruptcy means they will lose their home or never be able to rebuild their credit, but this is often not the case.

Schedule a case evaluation with our Houston bankruptcy attorney today!

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