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Federal agency to address debt collection issues

The Bureau of Consumer Financial Protection, the federal agency in charge of debt collection oversight in the United States, recently proposed a new set of rules for the purpose of increasing consumer protection and tightening the reins on creditors and debt collectors. They agency is reportedly looking for feedback regarding three areas: ensuring consumers understand their rights in the debt collection process; ensuring the information used by collectors is accurate; and addressing communication practices used by debt collectors.

At this point, it isn’t clear whether the rules in their final form will address the problem of medical debt collection. Because the agency has limited authority over debt collection by healthcare providers, it is not sure how the issue will be dealt with just yet. The Bureau of Consumer Financial Protection does have authority over medical debt once it has been transferred to third parties, but prior to that there isn’t full authority to issue regulations. 

As our readers know, medical debt is a major concern for many Americans and one of the leading causes of bankruptcy. One major cause of complaints concerning medical debt collection is that collection agencies try to collect debt that has already been paid, or an incorrect amount, or from the wrong person.

The agency has been attempting to draw more attention to the issue of medical debt collection lately, but it remains to be seen how far it can take things.

Medical debt can be discharged in bankruptcy, and those who find themselves in very difficult financial situations can and do have recourse to bankruptcy protection to find relief from crippling medical debt. The decision should never be taken lightly, but should be understood as an option for those who need it. 

Source: Forbes, “Have Medical Debt? More Help May Be On The Way,” Evan Albright, November 14, 2013. 

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