What is the Medical Debt Relief Act?

A bill to amend the Fair Credit Reporting Act to establish a 1-year waiting period before medical debt is reported on the consumer's credit report and to eliminate paid and settled medical debts from credit reports that have been paid or settled in full, to amend the Act Fair Debt Collection Practices to provide a representative for California's 45th congressional district. The main treaty on the FDCPA, the statute that drastically alters the way collection agencies, debt buyers and lawyers collect consumer debts. Veterans Affairs announced a plan to simplify medical debt forgiveness; those details have not yet been resolved. The VA also announced that it has made changes to the way it will report clinical debt for credit reporting purposes in the future.

By including unpaid medical debts on credit reports, healthcare providers are unnecessarily hurting consumers' creditworthiness. However, consumers with medical debts have virtually no other option to acquire their debts and receive far fewer benefits from debt than college graduates. Therefore, it will not eliminate medical debt, but it will eliminate some of the consequences associated with it. Amend the Fair Credit Reporting Act to establish a 1-year waiting period before medical debt is reported on a consumer's credit report and eliminate paid and settled medical debts from credit reports that have been paid or fully settled, to amend the Fair Practices Act of Debt Collection to provide a timetable for medical debt verification and increase the efficiency of credit markets with more perfect information and for other purposes.

Medical Debt Burden for American Families, Especially Black, Latino, and Low-Income Households, Rivals That of Student Debt. Adoption of this reform package would help reduce the racial wealth gap, stimulate the economy and provide more humane treatment to those whose health struggles are exacerbated by significant, unaffordable and unpredictable out-of-pocket medical costs. Recognizing that “medical bills are a unique type of debt, the three major credit reporting agencies have already begun to treat medical debt differently by offering consumers a 180-day grace period before an unpaid medical bill appears on their credit report. Patients who receive medically necessary treatment, on the other hand, may not want to go into debt and usually have no advance notice of the amount they will be billed.

This figure only reflects the medical debt that was reported before the start of the coronavirus pandemic. Medical debt payments under these plans must not exceed 7.5 per cent of the consumer's monthly household income. Amend the Fair Credit Reporting Act to establish a 1-year waiting period before medical debt is reported on a consumer's credit report and eliminate paid and settled medical debts from credit reports that have been paid or settled in full, to amend the Fair Collection Practices Act to provide a timetable for the verification of medical debt and to increase the efficiency of credit markets with more perfect information and for other purposes. Recognizing this reality, the state legislature in Senator Van Hollen's home state, Maryland, unanimously passed a bill to permanently stop aggressive medical debt collection practices21 Bruce DePuyt, Consumer Groups Say Medical Debt Bill Is a First Step, But More Needed , Maryland Matters (March 2016).

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