Many people avoid bankruptcy because they feel that it will affect their credit rating.  A bankruptcy will appear on your credit report, but so will unpaid medical bills.  The Dallas Morning News reported that the long lasting effect of medical billing on credit reports is finally gaining attention.  In two related articles, the mishaps and confusion between medical billing in general, insurance processing procedures, and consumer distraction tend to contribute to unpaid bills.

One consumer, Karen Rhode, didn’t find out that she had unpaid medical bills until she went to purchase a house and her credit report showed two unpaid accounts.  The two accounts totaled less than $100.00.  She lamented that if she had know about the accounts, she would have paid them.  As a result her credit rating was several points lower, and her interest rate higher.

Many people assume that their insurance company will take care of all the details.  One of the easiest ways to get buried in medical debt is to assume that your insurance will cover everything and they will let you know when they don’t.  The DMA article painfully highlights the issues associated with miscommunication in medical billing.  One example involves your primary care physician.  Many people again assume that if your doctor is in your network of providers that all the coverage associated with his services will also be covered.  Unfortunately, insurance coverage isn’t that simple.  If you are with a plan that is based on using a provider that is in the “network,” everyone that provides a service to you must also be in the network for you to avoid being stuck with the unpaid balance.

The best defense is a good offense—staying on top of medical billing is the best way to avoid collection efforts by a medical provider.  Sometimes, things just aren’t that simple though.  The medical bill is more than you planned and you can’t financially manage your way past it.  Your credit report is hit and now you’re paying a little bit more for everything because of a damage rating.  This is the point that you should start looking for other options.  One of your best defensive options is to talk to a bankruptcy attorney.  Just like the medical bill, bankruptcy will show up on your credit report, however, it will be a step that will eventually resolve your debts and get you back on track to rebuild your credit rating, instead of painfully dragging out your financial rehab for months.  When most people think of resolving debt through bankruptcy, they tend to focus on credit card debt because that is what is talked about the most.  The good news is that individual bankruptcy is a good remedy for any type of consumer debt, and medical debt is considered a consumer debt.  Because it is a consumer debt, you also get the same protections as any other debt, including automatic stay.  This means that an aggressive bill collector will have to immediately stop trying to collect on your account while the bankruptcy is pending.  The bottom line is that you would seek a specialist for a difficult medical procedure.  Your financial health deserves the same priority.  Contact a qualified bankruptcy attorney in your area to learn more about bankruptcy protection today.