Does paying medical bills over time effect your credit rating?

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Does paying medical bills over time effect your credit rating?

If I cannot afford to pay the full amount of my medical bills, (lets say I received a bill for a thousand dollars) but make arrangements to pay off the bill over time. Say a hundred a month. Can that harm my credit rating for not paying the full amount up front? Or is my credit rating safe as long as I make an attempt to pay off the debt.

Asked on August 20, 2010 under Bankruptcy Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

IF the creditor (the doctor, the hospital, etc.) AGREES to let you pay over time, there should be no harm to your credit, since in that case you are paying in accordance with the agreed-upon terms; i.e. you're not in arrears or default. However, if the creditor does not agree to this and you simply take it upon yourself to pay over time, then you would be in default--any time you do not pay the full amount due when due, it's default. (There is no right to change the payment terms; and while paying over time or paying as much as you can shows good faith and good character--as opposed to simply ignoring the debt--legally, you are violating the payment terms.) The creditor could then report you to the credit rating agencies, which would damage your credit. It is therefore in your interest to discuss this with the creditor and work out a payment plan which will have their support and agreement.


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