New Federal Medical Debt Rule Finalized

It’s no secret that medical debt is a huge issue in the United States. My own health insurance company just tripled my out-of-pocket responsibility to visit my PCP, despite widespread public support of their CEO’s murder by a handsome and hirsute hitman. Medical debt is the number one reason people in the United States file for bankruptcy. Americans have had enough, and lawmakers have responded with a new rule that will boost the credit of people struggling with medical debt. While it doesn’t eliminate medical debt entirely, it does eliminate medical debt from credit reports. Medical debt can stain a person’s credit history and make it harder for them to obtain favorable terms on loans and other agreements. This will be a thing of the past now that the Consumer Financial Protection Bureau has finalized a rule removing medical debt from credit reports. Vice President Kamala Harris introduced a proposal of this rule last June and will take effect in March 2025. This is expected to boost the average consumer’s credit score by 20 points. This comes in addition to many credit reporting agencies already voluntarily removing medical debt from credit reports. 

Will this new rule on medical debt help improve your credit and overall financial situation? Or is your debt a deeper issue that needs fixing? Discuss your situation in detail with an experienced Las Vegas bankruptcy lawyer– call 702-370-0155 to get started today. 

How Bankruptcy Can Impact Your Credit

This new rule eliminating medical debt from credit reports could improve the credit scores of millions of Americans and allow them more comfortable lifestyles. For some, this could delay a bankruptcy filing or remove the need for it altogether. But for others, medical debt is just one facet of a larger debt issue that won’t be solved by this new rule alone. Filing for bankruptcy can wipe out not just medical debts but other unsecured debts like credit cards, personal loans, and more. It can provide an opportunity to save your secured assets, such as stopping a vehicle repossession or home foreclosure, or to shed remaining debts from secured assets that have already been repossessed. These can have lasting damage on a person’s credit history and result in a poor credit score. Creditors can also bring lawsuits against debtors, which are negative marks on credit reports, and an eviction lawsuit can also result in a debtor being blacklisted as a renter. The automatic stay from bankruptcy provides a reprieve from these collection efforts so the debtor can avoid irreparable harm to their financial situation. A bankruptcy filing won’t remove a debtor from the renter blacklist after an eviction is complete. 

Debtors can experience different effects to their credit upon filing for bankruptcy. Some debtors may see their credit score drop, while others might see an increase, or no change at all. This will largely depend on the state of their credit before declaring bankruptcy. Someone with good credit is more likely to experience a credit score drop after filing for bankruptcy, while someone with a poor score is more likely to have their score change in a positive manner. Either way, a bankruptcy debtor can put in efforts to change and improve their credit after their case has been discharged. Making smart decisions when opening new lines of credit and staying current on them is crucial to improving credit after bankruptcy. If you have questions about the best ways to improve post-bankruptcy credit in our personal situation, schedule your free consultation with our firm at 702-370-0155. 

It is important to consider how bankruptcy will affect your credit in the long term as well. A bankruptcy filing will appear on your credit report and remain there for several years after discharge. It can be considered on financial applications, and any other application that requires a credit check, which can even include some financial employment opportunities. A chapter 7 bankruptcy will remain on the debtor’s credit report for ten years. A chapter 13 bankruptcy will remain on the debtor’s credit report for seven years. If a person struggling with medical debt doesn’t want the consequences of a bankruptcy filing on their credit history, they will need to find an alternative method of debt relief besides bankruptcy. However, bankruptcy is a powerful and efficient way to clear medical bills and other debts that could be harmful to that person’s credit. If you want more information so you can weigh the costs and benefits of filing for bankruptcy with more confidence, call 702-370-0155 for your free consultation with our firm. 

Will My Doctors Stop Treating Me If I File For Bankruptcy? 

When you clear certain creditors’ bills with bankruptcy, they are not obligated to continue providing you with that service without pay. If you are discharging a bill from a fairly common medical event like a broken bone, this probably won’t be a big deal for you. Plenty of doctors in every area can treat these kinds of issues. But this could become a problem if you live in a remote area or have an ongoing medical issue that requires treatment by a specialist. Here, it can become quite problematic if your doctor ceases treatment because you discharged their bill in bankruptcy. If this happens, you can ask your doctor to accept a post-bankruptcy payment agreement. Your doctor would have no right to pursue you as a creditor, but you can pay back your discharged bill so that your doctor can resume your medical treatments. This won’t apply in an emergency room setting- they are legally required to provide patients with medical treatments, regardless if they have previously declared bankruptcy. 

Your relationship with your medical providers could be just as important to your well-being as your financial situation. If you are still receiving medical care for an illness or injury, you will want to time your bankruptcy filing carefully to avoid interrupting your treatments. Schedule your free appointment with an experienced Las Vegas bankruptcy lawyer by calling 702-370-0155. 

Still Need Assistance With Medical Debt With This New Federal Rule? Learn More About Bankruptcy With Our Firm, Risk-Free. 

Having medical debt cleared from your credit could be helpful but not quite enough assistance to resolve your greater financial issues. While there is a stigma around declaring bankruptcy, it can actually help strengthen your credit in the long run. It is a tool that can help you stop lawsuits, wage garnishments, repossessions, and other creditor collection efforts that can make it harder and harder for you to resolve your debt issues. You can use chapter 7 to liquidate your debts or chapter 13 to reorganize them and pay off your secured debts with court protection from creditors. But errors in your petition could put your assets at risk and put your filing at risk. A bankruptcy petition is a complex legal document that is usually well over 50 pages long. This creates several opportunities for a debtor without bankruptcy knowledge and experience to make mistakes that could be fatal to your case. Let a skilled bankruptcy attorney take care of the most difficult parts of filing for bankruptcy so that it gets done right. Our Las Vegas bankruptcy team offers unparalleled service with payment plans tailored to fit your budget. Get started with your free consultation by phone- call 702-370-0155 to speak with a member of our team today.

Las Vegas Bankruptcy Lawyers

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Las Vegas, NV89128
Office: 702-879-2499
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HENDERSON
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Henderson, NV 89014
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