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Credit bureau says medical debt now tops $127 billion

Medical debt is a growing problem nationwide. According to data published by credit reporting agency Experian, unpaid medical bills were in excess of $127 billion last year. People in Texas with outstanding medical debts might receive collections calls or demand letters. They might even end up in court due to these debts. Almost 20 percent of Americans have had their credit scores negatively impacted because of unpaid medical debt.

Chapter 13 bankruptcy protection might allow some people to repay medical and other debts under terms they can manage. According to an analysis by NerdWallet Health, unpaid medical bills were the most common type of debt leading to bankruptcy in 2013. Health care costs ranked higher than credit card debts or outstanding mortgages.

In addition to simply not having the funds to cover them, there are a number of reasons medical bills go unpaid. A survey conducted by Consumer Reports found that 24 percent of people who had medical bills outstanding didn't know they owed the money, and 13 percent never got bills for the medical services.

The three largest credit bureaus, Experian, TransUnion and Equifax, have agreed not to report past-due medical bills until 180 days have passed. In situations where the bills are eventually paid by the patient's health insurance, there are regulations requiring the credit bureaus to remove mention of the bills from the credit report.

People in Texas who are struggling to make payments on medical bills might consider their options to reduce or erase their debts. Chapter 13 bankruptcy, also sometimes called wage-earners bankruptcy, is a good option for some debtors who are employed. An attorney might be able to help a debtor by drafting and filing the bankruptcy petition or by making sure the client completes the required steps prior to filing. An attorney could also attempt to negotiate down debts or represent the client during bankruptcy court hearings.

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