Medical Debt Relief Bill Proposed

Medical debt is a serious problem for hundreds of thousands of consumers, and it is a factor in a large percentage of personal bankruptcy filings every year. Given that more Americans are getting sick and requiring hospital care with the COVID-19 pandemic, medical debt is a bigger issue than ever before. According to a recent press release, U.S. Senator Jeff Merkley, along with members of the U.S. Senate and the U.S. House of Representatives, has introduced the Medical Debt Relief Act, which “would remove paid-off or settled medical debt from a patient’s credit report and institute a year-long waiting period before new medical debt can be reported.”

The proposed legislation is designed to help debtors maintain eligibility for credit despite medical debt, and for those consumers to have a chance to catch up on medical debt before their credit is harmfully affected. We want to say more about the proposed legislation, as well as the links between medical debt and consumer bankruptcy.

What Should You Know About the Medical Debt Relief Act?

According to Senator Merkley’s press release, the need for this type of legislation is apparent. As he explained, “there is nothing more outrageous than the fact that after a family has paid their medical debt, their credit is still destroyed as if that debt remains unpaid.” He clarified further that, without changing the law, “credit agencies are repeatedly kicking families when they are down and struggling to get back up, and in the middle of this devastating pandemic, it is long past time we fix that.” The legislation has been co-sponsored by U.S. Senators Robert Menendez (D-NJ), Richard Blumenthal (D-CT), and Chris Van Hollen (D-MD). It also has support from organizations that include the National Patient Advocate Foundation, the National Consumer Law Center, and the Consumer Federation of America.

While the proposed legislation, if it passes, could help consumers with medical debt to move forward with their lives without worrying about the harmful effects of derogatory credit related to that medical debt, the legislation does not specifically help consumers who cannot pay their medical debt. As the press release underscores, “even before the coronavirus crisis hit, tens of millions of Americans had a past-due health care bill on their credit report, and medical debt was a leading reason why Americans filed for bankruptcy.”

Understanding Consumer Bankruptcy and Medical Debt

Indeed, medical debt is a leading reason for consumer bankruptcy. According to a report from CNBC, more than 66% of all personal bankruptcy cases are linked to medical issues, including “high costs of care or time out of work.” As that report emphasizes, about 530,000 families seek bankruptcy protection every year because they cannot catch up on medical debt.

The report highlights the urgent need to address the underlying causes of medical debt—ineffective health insurance, and the inability to receive health care at a reasonable cost.

Contact an Oak Park Bankruptcy Lawyer

Do you have questions about filing for consumer bankruptcy? If you have overwhelming medical debt, personal bankruptcy may be able to help you get a fresh start. One of our Oak Park bankruptcy attorneys can help. Contact the Emerson Law Firm to learn more.



See Related Blog Posts:

Can I Modify a Chapter 13 Bankruptcy Repayment Plan?

What is a Hardship Discharge in Chapter 13 Bankruptcy?

Comments

Popular posts from this blog

New Information on Debts That Bankruptcy Cannot Discharge

Younger Parents Need an Estate Plan

Learning About Different Types of Wills