A person holds their phone up with the credit report on it.

Trying to Get Out of Medical Debt? New Changes May Help You.

Are you feeling the weight of your medical bills? President Biden just took steps to make medical debt less of a burden.

After the three major credit reporting agencies, Experian, Equifax, and TransUnion, announced changes to how they report medical debt in March, the Biden administration announced some new ways the federal government plans to help.

Home Buying Will Be Easier for Those with Medical Debt

The federal government backs many of the loans taken out by homebuyers each year through the Federal Housing Authority (FHA), the U.S. Department of Agriculture’s (USDA) Rural Development program, and the Federal Housing Finance Authority (FHFA). These agencies will make changes to decrease the impact of medical debt on your chances of getting a loan.

  • FHA will no longer take medical debt into consideration when making a decision about a loan application.
  • The USDA will not include recurring medical debt in your debt to income ratio, which increases the amount you can borrow.
  • FHFA will be reviewing how they use medical debt in their processes to improve your chances of getting a loan.

With these steps, potential home buyers with medical debt will be more likely to get mortgages than in the past.

Medical Debt Forgiveness for Veterans Will Be Easier

The U.S. Department of Veterans Affairs (VA) has already reduced the burden of medical bills by eliminating out-of-pocket costs for VA Healthcare through the American Rescue Plan Act. This resulted in co-payments being refunded to veterans who received care during the pandemic. The VA is now working to end the reporting of medical debt for those with VA care bills and end other medical debt reporting when possible. It will stop reporting medical debt to credit agencies altogether.

Additionally, the VA is working to create an easier process to request the forgiveness of medical debt, including an online form and a simple income requirement. The current process has been so difficult that many who would benefit from forgiveness are deterred from applying.

More Help Dealing with Medical Debt

The Consumer and Financial Protection Bureau (CFPB) is responsible for enforcing laws that protect consumers. They have announced that they will improve the educational tools on their website to help those with medical debt understand the rules about medical billing and help people find financial assistance. The CFPB will investigate the credit reporting agencies and bill collectors who violate patients’ rights.

Learn more about ways that you are protected as a consumer.

Learn more about managing finances after a cancer diagnosis.

About Triage Cancer

Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, caregivers, and health care professionals on cancer-related legal and practical issues. Through events, materials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.

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