Credit reporting is changing for medical debt. Starting July 1, 2022, previously defaulted, but subsequently repaid, medical debt will no longer be reported on someone’s credit. Next year, medical debt of less than $500 will not be reported on credit reports any longer. This doesn’t mean that the medical provider doesn’t have a claim however. It’s important to keep copies of these small medical bills and give them to your bankruptcy attorney so they can be officially discharged in your bankruptcy.
The timing can also be important. Remember, that you can only file a Chapter 7 every eight years. So if you have a medical procedure coming up that may have unexpected and you incur out-of-pocket costs, you may want to consider getting ready to file bankruptcy, but wait to actually file once you are medically cleared.
It’s often better to file a bankruptcy when you are unemployed. You don’t have to be without a job, but we’d rather you look into filing bankruptcy right after a medical procedure (so all out-of-pocket costs are discharged), but before you begin a new job.
Unfortunately, as medical costs continue to rise in the United States, medical debt remains one of the most listed reasons for someone having to file bankruptcy — to get that do-over, rather than remain in debt forever.
For questions about whether you should file, the timing and how everything would work in your situation, please contact us for a free bankruptcy consultation.