When Do Medical Collections Drop Off Your Credit Report in Florida?

Unpaid medical bills that result in medical collection efforts are a common blemish on credit records and among the leading causes of bankruptcy filings. While such negative events will stay on your credit record only for a specified period, in Florida or any other state, the medical provider or debt collection agency can continue to take legal action for the payment of this unresolved debt after that point.

Credit Reports

Credit reports are large and detailed files that are kept by three private organizations in the United States. TransUnion, Experian and Equifax, which are the three main credit bureaus, collect information about your financial status from financial institutions like banks and car financing companies that arrange loans for auto purchases. In addition, medical companies and even large retailers that extend consumer credit will report your timely or delayed payments to the credit rating agencies. All of this information is collected, analyzed by powerful software and presented in an easy-to-read format to both to you and the corporations that wish to evaluate your creditworthiness. A composite score is also produced that compares your financial history to other consumers in statistical terms.

Default

You should note that there is a significant difference between a default and a collection effort. A default occurs when you fail to pay an outstanding bill within the "grace period." The grace period is the amount of time, beyond the due date, during which you can pay a bill and still avoid a default. If for instance, the due date on a bill is February 10th and the grace period is 15 days, you can avoid a default by sending in your payment, in full, until the 25th of February. Furthermore, the due date on medical bills can usually be frozen while you have an ongoing dispute with your medical insurer. By calling the medical service provider and explaining that you have contacted the insurer regarding the bill, you can usually avoid a default while the insurer is investigating the claim.

Collections

A bill will be sent to collections only after you have defaulted on it, and the medical service provider has all but given up any hope of receiving payment. The right to collect your outstanding debt will then be sold, usually at a fraction of the outstanding amount, to a collection agency that specializes in collecting unpaid balances. At this point, you will no longer deal with the medical service provider but with the collector. Both a default and the initiation of collection efforts will negatively impact your credit report. The effect of the latter, however, is significantly worse.

Time Frame

Once an adverse event such as default on a bill or collection effort is reported to the credit agencies, such information will remain on your credit report for seven years. A bankruptcy filing will stay in the files for ten years.

The reporting of the event on your credit report and any efforts the collection agency might make to collect the outstanding payment are unrelated. The collector may continue to press for payment until the statue of limitations has passed, which depends on numerous factors.