This Debt May Soon Disappear From Credit Reports In New York

If Governor Kathy Hochul signs a recently passed bill, a certain type of debt will disappear from New Yorkers' credit reports. The bill (A06275A / S04907-A) passed in the Assembly on Tuesday, June 20, 2023, by a vote of 107 to 37. The Senate version already passed by a vote of 48 to 10. Now the bill is waiting for Gov. Hochul to sign it.

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New York Lawmakers Pass Bill Prohibiting Medical Debt From Impacting Credit

The bill prevents medical debt from being reported to credit agencies in New York,

Prohibits medical debt from being collected by a consumer reporting agency or included in a consumer report and prohibits medical service providers from reporting medical debt directly or indirectly to a consumer reporting agency.

The Democrat & Chronicle reports that a New York Health Foundation study found that more than 740,000 residents around New York State have medical debt that has been reported to a debt collection agency and their credit reports.

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Nationally, 28% of Black people and 22% of Hispanic/Latinos carry medical debt versus 17% of whites, New York-based advocacy group Community Service Society reported.

Medical debt can affect a person's ability to purchase a vehicle, rent or buy a house, get a credit card, and potentially even a job. Community Service Society says that 38% of New Yorkers avoided care or sacrificed other necessities because of the cost of health care.

The bill is waiting to be delivered to the governor for her signature or veto.

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