A recent study confirmed what every bankruptcy attorney already knows. Despite the mortgage crisis and rising credit card debt, medical debt is the leading cause of bankruptcy in America. Sadly, this type of debt doesn’t just happen to people without insurance. High deductible plans leave many families with medical debt they cannot pay off. There is a glimmer of hope, however. The Bureau of Consumer Financial Protection (CFPB) recently called on Congress to implement the infrastructure that will provide consumers with greater protections relating to medical debt.
Role of the CFPB
The role of the CFPB is to implement rules that regulate creditors and collectors. However, legally the CFPB is limited in its authority over health care providers and facilities. Debt from medical procedures is grouped as a non-financial instrument or non-voluntary expense. The CFPB’s authority over debt due to medical problems is only enacted once the health care provider transfers the debt to a third-party collection agency.
Fixing the Problem
Regulation over health care provider’s debt collection practices falls into a crack with very little oversight. The CFPB recognizes this. While the organization is not sure how to approach the problem, they are taking steps to provide greater protection for consumers. This past summer, CFPB Assistant Director Corey Stone spoke to the Senate Subcommittee on Banking about this very subject. He emphasized that protections need to come from regulatory agencies. Congress has the authority to expand the scope of CFPB oversight to include health care providers.
In the meantime, the CFPB is pursuing complaints regarding medical debts that have been passed to third-party collectors, as well as credit reporting problems stemming from medical debt. The organization says 10 percent of debt collection complaints submitted to them have to do with medical debt.
For many consumers, federal help will come too late. If you are faced with mounting medical debt, talk to a Troy, Ohio bankruptcy attorney. The professionals at the Chris Wesner Law Office make it their priority to stay on top of all new regulations and laws, both state and federal, regarding bankruptcy. Everyone’s situation is different. Contact us to talk about the best strategy for relieving your medical debt.
The post Medical Debt and Bankruptcy appeared first on Chris Wesner Law Office.