One of the most common kinds of debt people face is medical debt. While you can put off many purchases when money is tight, healthcare is one cost you cannot avoid. Whether a person has no health insurance, is underinsured, or is battling his insurance company for coverage, it is very easy to accumulate a lot of medical debt in a short period of time. While you are figuring out how to pay these astronomical bills, your healthcare provider will pass them on to a collection agency and now, suddenly, you are being harassed and threatened with a lawsuit. Is there anything you can do about it?
You Are Not Alone
The first thing to realize is that you are not alone. While a bill collector may make you feel like a criminal, you are certainly not the only person with medical bills they cannot pay. In fact, people are often contacted about medical debt that is not even theirs to begin with. According to a study conducted by the Public Interest Research Group (PIRG), most of the medical debt complaints received by the Consumer Finance Protection Bureau (FFPB) were about mistakes made by the debt collector. The study found that:
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Sixty-three percent of the complaints about medical debt collection received by the CFPB claimed either that the debt was never owed in the first place, it was already paid or discharged in bankruptcy, or it was not verified as the consumer’s debt.
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Many of the complaints accused debt collectors of aggressive tactics, such as frequent or repeated calls, calls to friends and family, threats of a lawsuit, or the use of abusive language.
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Thirty-five percent of the medical debt complaints received asserted that false medical debt had affected their credit reports.
So, what can you do about mistaken debt or abusive debt collection practices?
You First Need to Understand Your Rights
The federal Fair Debt Collection Practices Act affords you certain rights, even if you do legitimately owe the debt. Review your rights here so you know if a debt collector is violating them. Other steps you should take include the following:
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Send a certified letter to the collection agency asking for an itemized accounting of the debt.
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If you are disputing the validity of the debt, notify the collection agency in writing within 30 days.
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Starting September 15, 2017, the three major credit reporting agencies - Experian, Equifax and TransUnion - will set a 180 day waiting period before including medical debt on a consumer's credit report. The 6 month period in intended to ensure there is enough time to resolve disputes with insurers and delays in payment. In addition, the credit bureaus will remove medical debt from a consumers' credit report once it is paid by an insurer. Some credit scoring models don't penalize paid medical debt from any source.
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Understand the statute of limitations in your state. In general, you cannot be sued for medical debt that is more than five years old. Knowing if you are past this date will help your bargaining position.
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Contact an attorney if the harassment continues after you have sent official notice that the debt is not yours.
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