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Bill looks to give consumers 120 days to work out medical debts

Florida residents might be interested in learning about a new bill that was proposed to help protect the credit of consumers who have medical debt. Medical debt can do serious harm to a person's credit report. In addition, one in 10 insurance claims are incorrectly processed. This means that debt collectors are often working with account information that is potentially inaccurate or out of date.

The new bill, named Accuracy in Reporting Medical Debt Act, would give consumers 120 days to challenge or resolve their medical debts before collectors can report them to credit bureaus. This might reduce the need for debt relief. The bill would amend the Fair Debt Collection Practices Act. It is important to note that though the legislation prohibits collectors from reporting to credit bureaus for 120 days, it does not prohibit them from attempting to collect the debt during that time.

The bill is not intended to replace the proposed Medical Debt Relief Act. If they are both passed, the two laws are engineered to work together. The bill would give consumers a chance to resolve medical bills before they impact credit reports. The Medical Debt Relief Act would work from the other end by limiting long-term reporting of paid medical debt already reported to credit bureaus. Together, the bills are intended to help consumers protect their credit ratings.

Anyone who is struggling with medical debt or any other debt may wish to speak to a bankruptcy attorney. An attorney may be able to review debt obligations and make recommendations. While filing for bankruptcy may seem extreme, there are many circumstances in which it can offer a fresh start for someone who is unable to pay off their debts. An attorney may be able to suggest the best bankruptcy option for the situation.

Source: Consumerist, "Legislation Would Give Consumers 120 Days To Resolve Medical Debts Before Dinging Credit Reports", Chris Morran, May 28, 2013