A mounting tide of medical bills is often the major reason average Americans file for bankruptcy relief. They either had no insurance and got sick and ran up huge medical bills, or they had to quit their job which provided the insurance, and when their regular household expenses and their personal debts became too burdensome, they turned to credit card debt for short-term help.

Debtors under the age of 25 are sadly the fastest-growing group seeking bankruptcy protection, and much of the debt is poor credit card debt management (binge spending on plastic) and out-of-control medical bills as a young family is just forming.

While bankruptcy can sometimes be avoided, ones credit winds up being damaged by aggressive collection agencies that are hired by hospitals to collect past due medical bills.

It is interesting to note this fact: Medical bills do not ordinarily show up on a credit report. However, if your medical-related debt is defaulted and turned over to collections, then the collection account may show for 7 years on your credit report from the time service was received. This has nothing to do with the original hospital or doctor's office where the billing comes from. This time period was established by the Fair Credit Reporting Act.

An unpaid medical bill will not usually show up on your credit report unless the hospital or doctor to whom you owe the debt subscribes to at least one of the three major credit reporting agencies (Experian, Equifax or Trans Union) or the debt is turned over to a collection agency, which will definitely report it to one or more of the three credit bureaus. These bureaus and their contact info is found below:

Equifax
800-685-1111
www.equifax.com

Experian
888-EXPERIAN (888-397-3742)
www.experian.com

Trans Union
800-916-8800
www.transunion.com

Unfortunately, credit reporting is happening more and more as medical offices, hospitals and clinics search for ways to improve their cash flow and limit bad debt. You can't blame them for wanting to get paid for the services they provided.

But the high cost of medical care is often beyond the average person's ability to pay, and when they are sick and can't work, then they can really be put into a bind.

If you dispute the validity of the medical debt within 30 days of being notified that you owe it, a creditor or debt collector cannot place the account on your credit report without a notation that you dispute owing the debt.

Once a medical bill is reported to a credit report and you have agreed to pay the debt, you could try to negotiate to have the account removed from your credit report in exchange for payment.

But, be sure to get this agreement in writing (signed and dated by other party) in order for it to be legal and binding, BEFORE you send in your payment. Do not rely on the debt collectors' verbal promise that the account will be removed. You need to have a written record of everything that's agreed to before you pay.