Third-Party Debt Collectors Will Contact One in Five Adult Americans About Medical Bills in 2014
After an accident, victims shoulder both emotional and financial burdens. Oftentimes the worst of the economic blows comes from sky-high medical bills, many of which end up at collection agencies because families can’t keep up with the overwhelming expenses. A recent report from the Consumer Financial Protection Bureau (CFPB) suggests that the problem could be much worse than originally thought, because medical debt can follow families for years after the last bills have been paid.
According to the report, consumers’ credit scores may be unfairly and overly penalized for medical debt. That means that they look less creditworthy to potential lenders, causing repercussions that could prevent them from buying a home, car or paying for their child’s college.
When a bill goes into collections, a person’s credit score is lowered. It takes seven years for an unpaid debt to be erased from a credit report, making many families endure long-term hardships that in many cases of accidental injury were not even their fault.
According to a new analysis by NerdWallet, a personal finance website, Americans pay three times more in third-party collection of medical debt than for bank and credit card debt combined. This year, one in five adult Americans will be contacted by a third-party debt collector about a medical debt, according to the report.
The CFPB studied the credit scores and reports of five million consumers between 2011 and 2013. Researchers found that those with medical debt generally paid their bills at the same rate as people with higher credit scores. The findings also showed that people with medical expenses sent to collections were also as likely to pay off other debts than those with better scores.
Sometimes people don’t even know the medical debt has gone into collections until it shows up on their credit reports. Although there is an appeals process to adjust the score if errors are made, it can be an arduous task and may even be impossible for the most severely injured, such as those with traumatic brain injuries. Regardless, people should not have to endure harassment by debt collectors.
Lawmakers have been trying to pass the Medical Debt Responsibility Act, which would wipe medical debts from consumers’ credit reports within 45 days of it being settled or repaid. But the bill has been stuck in committee for years, and so the problem remains.
So what to do in the meantime?
There are some laws in Florida that aim to protect people who are struggling under the burden of debts, including the Florida Consumer Collection Practices Act, the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act. If you are being harassed by third-party debt collectors, contact the Florida Debt Fighters to find out how we can help.
People who have been injured due to someone else’s recklessness also may consider a personal injury lawsuit as an avenue for compensation.
In personal injury claims, the key is to prove negligence. To do that, you must show that:
- A person or entity had the legal responsibility to exercise reasonable care in a situation.
- That duty of care was breached.
- An injury occurred because of the reckless conduct.
- The harm directly caused damages (such as costly medical bills).
Medical bills aren’t the only things that could haunt families in the wake of a serious accident. In some injury situations, the victim is disabled fully and cannot return to work or work at the same capacity as before the accident. In other cases, another family member must quit working to act as a full-time caregiver or hire someone to provide nursing care for the victim. Personal injury awards allow families to collect compensation for lost wages as well, helping to position them for a more secure financial future.
The Florida Debt Fighters urge you to explore your legal options if you’ve been injured in an accident and are struggling under the weight of costly medical bills. Use our online contact form to reach the Disparti Law Group for an evaluation of your case. Even though you may be in financial trouble, an initial consultation with a personal injury lawyer is free.