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Millions of Americans continue to struggle with medical debt

New Jersey Senator Bob Menendez has joined several other senators in sponsoring federal legislation aimed at getting medical debt off the shoulders of hard-working Americans. At issue is the fact that medical debt continues to plague as many as 72 million individuals across the country.

The Medical Debt Responsibility Act takes direct aim at credit reporting companies to ensure that paid medical debt is removed from a person's credit report within 45 days from the date it is paid off or settled. As it stands now, ongoing negative credit ratings from medical bills have forced some of those affected to consider filing for personal bankruptcy as a means of getting their financial house in order.

In New Jersey and elsewhere, those owing medical debt often find the matter has been noted on their credit report. Many times, this notation occurs without the knowledge of the individual, particularly because bills are often first submitted to insurance companies for payment. However, the negative action sometimes remains on a person's credit report for years after its entry, even in cases where the bill has been fully satisfied. This can result in denial of credit and higher interest rates, unfairly strapping individuals and families with additional debt and fewer options to resolve any financial difficulties. The bill would bar companies from using paid off or settled medical debt when considering a person's credit worthiness.

This welcome legislation should help some New Jersey families victimized by unfair credit ratings attributed to paid medical debt. For some, however, the proposed law may be too little too late. Individuals already affected by these credit reporting tactics may have already been denied credit or encountered additional financial problems occasioned by an unfair credit rating. For those suffering from this continuing problem with no relief in sight, personal bankruptcy offers a way to conquer outstanding debt in a manner that will enable a fresh financial beginning.

Source: KTVZ, "Merkley: Paid Medical Bills Shouldn't Hurt Credit," March 2, 2012

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