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Most collection calls are for medical debt

On Behalf of | Feb 2, 2017 | Bankruptcy

Many people in Virginia have unpaid medical bills that have gone into collections. According to a recent study by the Consumer Financial Protection Bureau, more collection calls are made for unpaid medical bills than for any other type of debt. After medical debt, the other most common reasons for collection calls are overdue telecommunications bills and utility payments.

The CFPB study found that medical debt is a problem that is not specific to people with low incomes or bad credit scores. Medical debt is also a very common problem among people in every age group. A poll that was taken in 2015 showed that 26 percent of respondents that had health insurance felt medical bills were a significant financial burden for them.

When medical debt is turned over to a collections agency, the debtor’s credit score can take a big hit. Some people argue that a consequence of medical debt reporting is that people are more reluctant to seek medical care. Not only can going to the hospital result in debt, but it can also result in poor credit. To prevent these kinds of consequences for people with medical emergencies, nonprofit hospitals are not allowed to try to collect a medical debt until 120 days have passed since the first billing statement.

Many people with outstanding debts are subjected to unlawful collections tactics. An individual who is overwhelmed by collection calls and letters may want to talk to an attorney about their debt situation. After looking into each debt, an attorney may be able to determine whether any of the debts are ineligible for collection. If the remaining debts are still significant, an attorney may help the debtor to reorganize debt into an affordable payment plan by filing for Chapter 13 bankruptcy.