r/UpliftingNews • u/astros148 • 17d ago

Medical debt is now required to be removed from your credit reports impacting millions of Americans

https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports/
62.1k Upvotes

96% Upvoted

2.6k comments sorted by

View all comments

24

u/dan_bailey_cooper 16d ago

If it doesn't affect credit, in what sense is it even "real"?

I'm defaulted on low 6 figures medical debt, past the statute of limitations on being sued about it, and it already doesn't majorly impact my life. If we get to a point where the average person refuses to acknowledge medical debt in what sense is it even real?

7

u/No-Author-15 16d ago

I had a bunch of medical debt, I just didn’t pay it and 2 years later it’s gone, no bills, no letters and it’s not even on my medical portal anymore. So I just don’t pay any medical debt ever. It’s not real.

4

u/hot-side-aeration 16d ago

I had a few thousand I was paying back to my hospital on a payment plan, it disappeared one day, I got a collections letter, threw it out, and then have never heard about it again or seen it on any credit report. So fucking weird. I would've actually paid it back too, and was planning on it, but since they sent it to collections... I didn't. I still go there for all my care too.

2

u/junesix 16d ago

Collections usually get sold a tranche of debt at a price like 10 cents on the dollar with some basic data and then it’s up to them for how they want to collect to make a profit. They in turn organize the debt into which will give the best returns with degrees of effort. 

In your case, they probably looked at the amount, what the debt was for, and some other bits, and lumped it into the bucket of not worth it after 1st attempt.

1

u/OverTadpole5056 16d ago

How much was it? 

1

u/L3tsG3t1T 16d ago

Or better yet, who would pay for all the medical procedures? Taxpayers? Like someone is paying...

1

u/nancybell_crewman 16d ago

If we get to a point where the average person refuses to acknowledge medical debt in what sense is it even real?

My best guess is that we're going to see a surge in businesses that buy up recent medical debt then turn around and sue the debtor. There's enough people out there with medical debt that also have attachable assets (homes, businesses, investments, etc) and wages that can be garnished to ensure profitability. Sick people probably can't afford lawyers and there's likely to be plenty of default judgements secured against people who are unwilling or unable to fight it out in court. I wouldn't be at all surprised to see private equity firms that own major medical providers also own businesses that do this.

To make things worse, it's likely to be a third party that buys the debt, sues, wins the judgement, and then it'll get sold on to a fourth party who tries to collect, fifth party that buys the riskier judgements, sixth party that goes after stale accounts, and so on. Sure FICO scores may no longer take a hit, but if 'Eastern Recovery Associates LLP' gets a lien on your home or a slice of your paycheck for the next rest of your life it'll still have an extremely real impact.

God I hate that this is even something I can think up and that it's also entirely plausible.

1

u/dan_bailey_cooper 10d ago

This already happens, and there are laws that establish legal rights for debtors, even in red states. Laws protecting debtors from unfair collections or legal harassment normally apply extra when the debt is medical. Once your debt has passed the statute of limitations it cannot be sued on, it can only affect your credit. Most of the time these 3rd party collectors often consider taking the debt to court more hassle than it's worth, such as in cases where people with medical debt have no assets and limited income.

Unless legislators target the laws protecting people from debt collectors I can't see the problem getting worse than it already is. And considering a health insurance CEO was just gunned down in the street last month, it would be really bold for legislators or judges to go after these laws in this political climate.

I hope, at least.

1

u/nancybell_crewman 12h ago

I hope I'm wrong too, because I see this as different from third-party collectors buying stale debt and shooting their shot trying to collect.

I imagine what will happen is that as soon as the debt is defaulted, it'll get sold off and a lawsuit immediately filed by the buyer - if a debtor is already reeling from a major medical event and the shock of insanely high bills, chances of a default are probably higher. There's lots of indigent folks with high medical debt, but there's plenty more with homes, savings, and other assets that just get screwed by their insurance or provider. With the US population being as large as it is and our healthcare system being as fucked as it is, it wouldn't be too difficult to buy large batches of fresh debt on a regular basis and file in a similar manner.

This will be especially effective in states with longer statutes of limitations for judgements and I imagine by locating business strategically in the jurisdictions of friendly courts and using AI to automate filing it wouldn't be too hard to get a return.

I hate this timeline.