What do I do when my medical bills have gone to collection?
February 3, 2009 1:21 PM   Subscribe

I don't know anything about dealing with collection agencies. I have medical debt from spring/summer 2008 totalling around $2500, from about 7 different billers (hospital, ambulance, doctors). Some of it has gone to collection. I do not have $2500. What should I do?

I have been getting notices in the mail for a couple of months now. Due to depression I have not contacted any of my billers. AFAIK they are not calling me, but my land line is unlisted and there is no voicemail or answering machine on it. I do not have any assets. I have a full time job ($33K per year) and a lot of credit card debt (not maxed out; I could put the $2500 on a card). I am not planning to buy a house in the next few years or open any new credit lines so I am not overly concerned about my credit score (which is currently around 700). I am in Illinois if that is relevant.
posted by anonymous to Work & Money (12 answers total) 6 users marked this as a favorite
I'm not too familiar with such large bills but it's always a good idea to talk to the companies to which you owe money. My suggestion is to call them, either the collection agencies or the hospitals themselves, and explain your situation. Ask if you can set up a payment plan.
posted by big open mouth at 1:44 PM on February 3, 2009

You could pay off the debt. It's unfortunate you let it go into collections - medical institutions tend to offer ridiculously low interest rates and long payment schedules on debt. You can negotiate with the bill collectors. They paid for the debt with pennies on the dollar, so they tend to be amiable to a reasonable settlement (say, the full value).

Alternatively, if you really don't care about your credit score, you could just not pay it or acknowledge the debt and let it drop off after the statutory limit (I believe 10 years; deadbeats on the internet could tell you exactly). I wouldn't suggest that though - you never know when you need credit for something unexpected.

All in all, $2500 is not that much money. I don't think you want to do something too drastic over that amount. Take it as a lesson if nothing else.
posted by saeculorum at 1:47 PM on February 3, 2009

When this happened to me I eventually resorted to putting it on my credit card. having it on there sucks (i'm still paying that shit) but having collections against you on your credit report is worse. You say you arent worried about your credit score but . . . you should be. You never know. Try as hard as you can to keep it clean.

I know how hard it is to talk to the bill collectors but they may be able to work something out with you. I know it feels like they are judging you but really, its just their job and i'm willing to bet they hate it and sympathize with the vast majority of the people they speak to.
posted by lblair at 1:48 PM on February 3, 2009

I can sympathize. My family accumulates a lot of medical debt which we eventually pay off and then accumulate again. Your first step is to call the places where the debt originated (hospitals, doctor's offices, etc.) and make sure that they really did send it to the collection agencies. If the collection notices are indeed legitimate, you can start sending them small payments each month (whatever you can afford) until it's paid off. Try not to stress over it (easier said than done, I know). $2500 is not an insurmountable sum. It looks overwhelming right now, but by making small payments you'll eventually see a light at the end of the tunnel. Best wishes to you.
posted by amyms at 1:48 PM on February 3, 2009

Step one should be finding out what your rights are - this, so that you are not taken advantage of or caused undue distress. For example, where I am, a collection agency cannot call before and after certain hours. They cannot bully you. They cannot call you at work if you explicitly request that they do not. Hopefully, someone here can point you to the laws that protect you in your state.

Good luck; I've been there too.
posted by kitcat at 1:48 PM on February 3, 2009

Sorry for your troubles, but you do need to deal with this.

Arrange with them to make payments if you can and then follow through on the agreement. If that's not an option, and if you can swing it, but it on a credit card and focus on paying it off. Since you didn't mention it, it's kind of hard to define what "a lot" of credit card debt is.

It doesn't matter if you're not planning on buying a house, credit reports get pulled for everything - apartment rentals, auto loans, anything where you need to verify you are not a financial liability. It takes somewhere in the 7 year range for something like that to come off your report, or at least it did 9 years ago when I had one "30 days late" credit card ding hit my report.

Maintaining and improving your credit is not a "when you feel like it" or "when I need to" kind of activity, nor is it something that can be fixed quickly especially when it comes to a big delinquency hit like that. The truth is, you can plan for many financial events, but you just don't know when you'll need to take out a line of credit.

700 is a decent score and it'd be a damn shame for you to throw it out the window.
posted by jerseygirl at 1:48 PM on February 3, 2009

Start contacting the creditors and ask to make payment arrangements and ask if there is anyway to pay less than the full amount, this is particularly true of the hospital portion. I would call the original entity before contacting the collection agency, although some will tell you that it's been turned over to collections and won't talk to you but try with the original biller first. If you do talk to a collection agency, make a deal with them since most will accept less but you have to stick to the agreed upon terms. Be pitiful and contrite but show that you want to take care of it. (Sick, overwhelmed, worried, broke, etc.)

Be careful of the number you call from, especially 800 numbers, because they can't be blocked and the entity can capture your number.

I'd advise against putting it on your credit card. Most medical bills don't accrue much if any interest so it'll be cheaper in the long run than putting it on your card. Also, you may need the credit card for another emergency. Always leave yourself some wiggle room. As for your credit score, most creditors will reflect that you've paid your bill on your credit report and you can negotiate a little on how things get reflected. Get a copy of your credit report and check it every six months.
posted by shoesietart at 1:49 PM on February 3, 2009

I have had medical bills go to collections also.

I had success by simply ignoring the collection agency but contacting the original office/doctor/service to whom I owed the money and saying I wanted to set up a payment plan.

This benefits the office/doctor/service because they get 100% of the bill; they don't have to pay the collections folks their cut. Also, they're much easier to deal with than collections.

The frustrating part is the multiple bills; It can be hard to keep track of them (trust me, I know). Keep a separate (large) envelope for each bill that comes in and note on the outside each time you pay them and how much. And don't be afraid to ask questions - like has this been billed to my insurance yet (in my experience Ambulance companies don't have access to your insurance info and so will bill you the full amount; sending them your insurance info will cut the charge down by hundreds of dollars).
posted by anastasiav at 1:58 PM on February 3, 2009

1. Call the companies/collection agencies and get proof of what you owe. Do not be confrontational, but also do not admit you owe the debt -- especially with collection agencies, who might not even own your debt but will use a recording of you admitting it to claim they do (see consumerist.com for more on this.)

2. Find a legitimate, free credit counseling service, bring them your debts, and work out a plan. Make sure they know about any debts that you feel are erroneous.

3. Start paying according to the plan. Follow up with the debtors every month to make sure they're getting paid; sometimes the credit counseling services screw up, and it's up to you to keep an eye on their results (as they're acting on your behalf.)

4. Be patient. If you get impatient and get some gift money or additional income, talk to the credit counseling company about how to pay more than the monthly amount as a one-off that month.

5. While you wait, start working on your credit scores, to remove false information and otherwise legally clean up what's in there.

This is the method that my wife and I used to pay off more than $50,000 of her pre-existing (pre-me) debt, even though neither of us had a job you would consider well-paying. It took several years, but ten years have passed since then and we now have no debt, 750+ credit scores, and a lot of peace of mind associated with those two things.
posted by davejay at 5:18 PM on February 3, 2009

I think others have given good advice, but I would make an additional recommendation:

Never talk to a debt collector on the telephone.

Maybe some debt collectors conduct their business in an honest and honorable manner, but many do not. Even if you intend to pay every cent that you owe, I would strongly recommend doing all business with them in writing.

If you send a debt collector something in the mail that is time sensitive -- for example, if they make an offer (in writing) to remove a collection from your credit record if you send payment by a certain date -- I strongly recommend that you send it via certified mail.
posted by Juffo-Wup at 6:53 PM on February 3, 2009

I had a portion of a medical bill go to collections due to a dispute. I was told, I believe by the hospital official I talked it out with, that medical debts don't go against your credit score. This was 15+ years ago and laws may have changed, but I can vouch that my credit score was in fact not affected. I'm not advising you to skip out on your debt, but the credit score issue might not be a problem if you do.
posted by BinGregory at 7:05 PM on February 3, 2009

CreditBoards has been incredibly helpful as I've dealt with a very similar situation. But you should know that medical collections DO show up on credit reports and $2500 going to collections is still plenty to get you denied auto loans, for example...says the voice of experience.

Be careful when dealing with those collections agencies, and best of luck with everything.
posted by teremala at 9:36 PM on February 3, 2009

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