Medical Bills Sent to Collection Agency Making Threats – Settle Debt or Pay What I can Afford?
A few years back, I had a hernia surgery. My parents paid for part of the procedure, and the hospital was able to cover the cost of the operating room with their indigent fund. However, a previous E.R. visit generated a bill for a little over $600.
I have been getting a lot of these calls regarding it, with a recording "Is this" (different voice) "John C.." (different voice) "If so, press one". I had gotten some previously, and stayed on the line long enough to explain that I had been working on creative projects and doing odd jobs, and I had no significant assets. Then, the debt got passed to a Franklin Collection Agency. The guy sounded friendly enough, but he says that if I just start paying what I'd prefer to, the debt will go to their legal department, and I'd have to pay an additional $200 in court costs.
Allowing the case to go forward isn't completely out of the question, since a wage garnishment would affect me only when things were going well enough to have a wage (they are also helping me get some dental work done); but I'd prefer to pay e.g. $50/month. They say that if I don't give them an account with automatic withdrawal, and agree to give them ~$164, or pay ~$219 with a non-automatic withdrawal account, that it will not prevent them from sending me a summons, and, the fellow said, "Frankly, I don't know why you haven't gotten one already."
I may be able to scrape one of these amounts together, but I'd really like some advice on if the guy with Franklin is telling it straight, and what are the pros and cons of either 1) paying it like they want, 2) just paying, say $50/month anyway, or 3) not paying it. It seemed like a last-minute ambush for money TODAY, but maybe or maybe not how they are proceeding is normal, and I should just cough up badly needed money. He says "the bank" is unwilling to accept a settlement.
Should I go to court, can I get a public defender, and are my odds good at getting a 60% settlement?
What do I do about medical debt and the collection agency saying summons is overdue?
—John C.
Short answer
Take a collector’s talk of a lawsuit being long overdue with a grain of salt. Medical debt tends to settle at higher percentages than credit card debt, so if you are already preparing to settle at around 60 percent, save the money as fast as you can and settle, rather than sending payments.
Key points on this page
- Debt collectors are trained to press your emotional and stress buttons to get paid, and a reference to being sued is an effective one. It does not mean a lawsuit is coming.
- Negotiating a lower payoff on medical debt is often done at higher rates than on credit cards, which means you save less.
- The lower the medical debt, the more the general rules about which accounts belong in a settlement plan apply.
- Small payments you send without an agreement in place do not necessarily prevent a summons.
- Around 60 percent looks like a realistic settlement on this kind of medical bill. Get the money together first, then negotiate.
When a debt collector tells you that your being sued is long overdue, take it with a grain of salt. It is not that they cannot or will not sue. I would need a whole lot more information in order to offer feedback about the risk of that happening to you. But collectors are trained to press your emotional and stress buttons in order to get paid. Making reference to being sued is rather effective.
Settling medical debt is often different than negotiation credit card bills that went unpaid.
You mentioned he said “the bank” and used quotes. The debt collector you spoke with probably also collects on bank debts, not just medical bills. I would not read too much into that other than, here is an example of a guy following his script and routine in order to get some form of payment – which accents my point about his reference to a summons being over due.
Negotiating a lower payoff and settling medical debt is often done at higher rates. In other words, you do not save as much. The lower the medical debt, the more the principles I laid out in this article apply: https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan
If you are unable to make payments as high as the debt collector is requesting; if sending smaller payments (that are not agreed to in advance) does not prevent a summons; if you already are preparing yourself mentally and financially to settle at 60% – Save up the money as fast as you are able and settle the medical bill rather than make payments.
I think you can settle this for close to 60%. When you are ready with the money, come back and review the debt settlement section of our fee online debt relief system. Post questions on this page and get feedback.
Any questions or concerns you have after reading my feedback can be posted in the comments below. All readers concerned about dealing with medical debt in collections can post below and receive feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Hello, I have medical bills from 2012. I am being sued by a lawyer for $3700. Just received the summons today saying I have to “answer” within 20 days. I am currently paying other medical bills and cannot pay the full amount. Should I call the attorney to try and negotiate? I have a lot of school loan debt as well – about $70,000 that I’m slowly working on. I am a teacher and make a little money-enough to pay daycare costs, some school loans, etc. I could pay about 50% up front and that’s pushing it. Thanks for any help!
Was any portion of the bill you are being sued for covered by insurance?
Is the plaintiff the service provider or a medical debt purchaser?
One of my relatives was recently in an auto accident and she was injured. It was dark, there were no witnesses, and the other party apparently lied to the policeman about what happened and the accident report appears to be in the other party’s favor. Ultimately, it is a case that will be hard to prove. My relative has no medical insurance because she attempted to receive help by applying ObamaCare (Texas) and they would not help her. At her job, she is classified as part-time and she does not qualify for the medical nor does she make much money. The hospital bill alone is almost $32,000.00. Her car was completely totaled. She is not covered medically as a driver on her auto insurance. The insurance agreed to pay her for the totaled car and that is what she plans to use to pay some of the medical bills with. She will not have enough money to pay the hospital what it is asking for. She turned in an assistance application at the hospital, but it has been almost 30 days and she is getting nervous. She just got the gigantic bill from the hospital the other day and the due date is in about one week according to the bill (which is kind of short notice). She called the phone number on the bill and explained that a lady at the hospital (the branch that she went to and attached a copy of the lady’s business card to the letter) is working on her assistance application. She was told to send the amount that she could at this time. She sent them a check yesterday along with a short letter summarizing what she told the billing dept. over the phone. She was attended to in the emergency room when she arrived and then transferred to a hospital bed in the hospital, had a 45 minute surgery to repair a rather deep laceration near the elbow joint on her arm, and stayed overnight. I, personally, think the hospital bill is overly inflated. Could she perhaps offer them a lump sum of 50% to 60% less? (We are thinking about loaning her the money interest free so she does not have to deal with the hospital. It will take her a long time to pay us, but she is good for it) Also, if they filed a hospital lien, how can she be sure that they remove it? She is in a bind. I am worried about her. What would you suggest?
I would not do anything until you learn the outcome of the assistance application. Post an update with what occurs with that and lets go from there.
I received a summons for an alleged medical bill from an ER visit. The Collection agency is suing me for the amount of the bill $268.64 a pre-judgement interest fee of 8% in the amount of $4.70, complaint filing fee of $97.00, reasonable attorney fees, estimated service fee of at least $25, and a post judgement interest fee of 8%.
The bill for my hospital visit, i believed was paid through the hospital. I never received a bill from emergency physicians at porter (listed as the original creditor). I have called the hospital and received a $0 balance statement as I paid the hospital upon receipt of my bill. Also, they are citing the account statement prepared by the CA as evidence of debt and Citing terms and conditions of an agreement I made with the hospital (Not the collection agency, nor the originating creditor) for collecting the interest attorney’s fees and other above fees listed.
Questions:
1 I do not believe this to be proof of debt as it is not a direct bill from Emergency Physicians at Porter (EPP) or signed agreement between myself and EPP. Is that something I could pursue?
2 Is their reference in using my agreement with the hospital to “collect reasonable attorney fees and interest” because it is neither an agreement between myself and the CA nor myself and EPP?
3 If the agreement signed by me with the hospital, it states “any remaining charges are due and payable upon receipt of bill” however I did not received a bill. Is it the plantiff’s (The CA’s) burden of proof then to show that I did in fact receive a bill from the originating creditor.
I will consult an attorney on this matter in the state of CO. I did call EPP and ask if they had anything on file for me. They mentioned there was an account that was turned over to collections. I asked to verify the address they had on file for me and that they sent a bill. The address is correct. I stated I never received calls from them that I had not paid the bill and she said “Unfortunately because we service bills nationally, unless we are flagged with a return mail address they get turned over to collections after a period of time.” I requested a statement to be mailed to me.
Any help you can provide is much appreciated! Thank you!
1. I would pursue it.
2. I cannot answer that, I do not have all of the documents, and it is something to ask an attorney to go over with you to determine.
3. That burden appears to indeed be on the collector. You will have to get the court to agree to see this that way of course.
Hello,
I live in Colorado and just received a summons for roughly $800 from when my child was hospitalized about two years ago. The summons is from the collections agency that bugged me for about 6 months and then stopped contacting me. I can pay the amount now and frankly am not 100% sure we actually owe the debt.
Few questions:
1. Should I contact the hospital directly about paying any balance?
2. I want to avoid court. If I can’t work with the provider, should I try to settle with the CA?
3. If I am able to settle, do I still have to respond to the summons? If so, do I just say it has been paid and provide documentation?
Truly any advice is appreciated and helpful.
Contacting the hospital or medical service provider now that you have been sued will not get you anywhere. You have to deal with this at the court level.
It is possible to settle the medical bill for less than what they are suing for. You will want to contact the debt collection attorney suing in order to do that. Use the tips about negotiating a pay off when sued.
If I were unsure whether the medical debt is even due (insurance already paid, was not a procedure or service provided to your child, an error, etc), I would probably answer the complaint denying the debt and start communicating with the debt collector about proof the debt is owed. If it is established to be a valid debt, I would then look at negotiating the amount to a lower lump sum pay off.
Hi Michael!
If I am presented with a $58,000 medical bill, what would be a reasonable amount to negotiate with the hospital for a one time payment? They offered me a 20% discount but I am told I should negotiate a higher percentage since they would get pennies on the dollar if they sold it to collections. Thoughts?
Thank you!
How old is the debt?
How collectable do you look (home, cars, on time payments to credit cards, etc)?
Try not to get hung up on stuff about selling and buying debt for pennies on the dollar. Some debts never get sold, and these things are done in huge volume by people who do not think by one account at a time. They do not see pennies on the dollar the way you and I do.
Debt is since last August. I have been able to hold off going to collections while I was working with my insurance carrier. That does not look like it will go in my favor. I do not own a home. I have an older car. My credit score in 805 (I always pay on-time).
I am thinking that the hospital wants to get as much as they can but what would be reasonable to offer them? For example, I could make a one-time payment of 25,000-30,000, which is 50% of the original bill.
If your insurance is not covering anything, I would say 50 percent is a realistic target for settlement.
There are instances where you can settle for much less if you can show close to indigent qualified, but that does not appear to be the case here.
Can I settle with the provider (doctor is willing) and file a motion to vacate or dismiss with the court and show proof that the debt is paid so that the judgement is not filed and they leave me alone? The collection agency is being difficult and rude since I am trying to work out a settlement.
I edited out the repetitive part of your post April.
It sounds like you need to file an answer, even with just general denials. I am not sure how effective what ever you get done today will be if it is anything other than meeting any answer deadline so that you have more time to navigate all of this.
I am in Washington State and I need to respond to judgment summons by collection attorney TODAY. This was a $1,000 medical collection, which has ballooned to $1800+ with the collection agency (YCCS). Can I settle with the doctor (he is willing) and then file a motion to vacate due to the debt being paid (showing proof) and cut out the collection attorney?
You are really under the gun, and may have to respond with general denials. That would buy you some time (more than the roughly 3 hours left before end of business today) to implement paying the service provider, or other alternatives.
Because you are being sued, I would recommend talking with an experienced debt defense attorney in Washington state.
Hello,
She has no other debts. She has no employment at the moment and is not able to handle it right now (medications, etc.) One hospital wants us to co-sign her application for assistance, saying we will not be liable if we do sign, but we refused. Another hospital is already threatening collections if she doesn’t get on some kind of assistance, and this is only a week since she was released. As to further need, she has need of medications and possibility for future need since her condition is volatile.
Since she is of age she is trying to apply for assistance as household of one, just herself, but they insist on every adult living with her and all their assets, not just her assets. We don’t see the need for it, since she lives in our home, but is not legally under our care, and the car / home , etc. do not belong to her.
It is amusing to note the lofty creed at this non profit hospital- of helping the poor and unfortunate, in the light of what’s going on.
Thank you,
vc
Hello,
I hope you can give me some advice. My 25 yr. old daughter was hospitalized for mental condition and now is faced with over 30,000 in debt. She is not able to work, and filed for disability but chances of getting it are slim ( her age, not enough work credits). As to Medicaid for which she is applying, it seems she is not eligible (again age). We live in Alaska. We (the family) give her room and board, and try to help but we have no means to pay this bill for her. The applications for Medicaid are very intrusive, want to know all family members income, etc. even though she is an adult and not a dependent. Applying for the charity from the hospital is even worse, because they want all the family assets ( just because she lives with us). My husband and I are reluctant to give the information, so as not to compromise the household since we have younger children in our care. Could we be held liable for her debt if we give the information they request? Please advise.
Thank you,
vc
She is of majority age. Did you or your wife sign anything taking on any financial responsibility?
Has her situation stabilized, or is there immediate potential for additional medical costs?
Has she looked at her options with chapter 7 bankruptcy? Are there other debts beside the medical bills?
I cannot see the needs based information questionnaires, so cannot respond with confidence. Those forms are often more about identifying who will get full or partial indigence charity based on need, and not a way to establish liability for payments.
Thank you. I will try that and go from there. I moved last year and a lot of the paperwork is hard to find. It might’ve been they said I didn’t have coverage with them (the insurance company) for a year, and that’s why it was denied. Is that a violation of the Affordable Care Act?
I will contact them once I get off work.
Thank you for your help!
You need to do three things right away: first contact your insurance company and find out exactly WHY they denied the claim. Then file an appeal. You ALWAYS have the right to appeal a denial of care.
Next contact the Insurance Commissioner for your state and file a complaint that your carrier denied care in violation of the Affordable Care Act.
Last: set up a payment plan because even if your carrier does pay the claim now you are going to have something out of pocket on this hospitalization. Even if it is $50 a payday you are better off than stuffing the bills in a sock drawer until they sue you.
Hi. In June or July 2012 I was hospitalized for a few days. I used my health insurance card from my work. Months later I got a letter that I could owe $40,000 because my insurance wouldn’t cover it. I explained I had insurance and to bill them. After a while the hospital said the insurance wouldn’t pay because of a preexisting condition. I told them I thought they couldn’t do that any more (by now it was 2014). Then they said my insurance wouldn’t pay because I hadn’t been with my company for a year at the time I was hospitalized. I was weeks to a month short. That didn’t make sense to me either because my insurance card says right on it the effective date, which was Sept. 2011. Then I told the hospital I couldn’t pay their huge bill and didn’t have the money. They sent me bill after bill for $16,900 (can’t remember exact amount, but close to that figure). I stuffed the bills in my sock drawer, promptly forgetting about them.
Then just recently I got a call from a collector. He claimed I owed $20,000. Also mentioned my good credit. I told him how I thought the insurance should pay and I don’t know if I handled it well but at the end he said he was putting me down as refused to pay. He hung up before I could get his contact info. Now I am worried about getting sued and wage garnishment.
I’m not sure what I should do. Your advice would be appreciated. Thank you.
Last year I had emergency surgery without any insurance. My bills totaled over $120,000.00.
I requested charity from the hospital and received a huge discount but still owed $21,000.00 just to them. Other medical bills are being paid with monthly payments. I am making monthly payments without fail, to the hospital but they still sent me to collections. The man I spoke to at the agency was very rude and threatened to take out home. My name is the only one on the bill. My husband and I are both on Social Security. Our funds are limited. The hospital will not return my calls. Do I need a lawyer or can I just keep sending in payments each month. I have every intention of paying this debt but now they have tacked on $2400.00 in interest. Please help.
What state do you live in, and how much equity do you have in your home.
Can you be exact in quoting what it was the collector said when threatening to take your home?
I’m in California.
The man at the agency kept repeating “you have a home” and “you have real estate. ”
Our house is actually upside down at this point and we are already paying two small loans on the house now.
Being upside down on the home equity, and in a fixed income situation with the social security, it could make a great deal more sense to file chapter 7 bankruptcy, than continuing down the path you are on. Have you consulted with a bankruptcy attorney about that option?
We would rather not file bankruptcy at this time. We are my mother’s caregivers and I am on her bank accounts.
My main question right now is how can they send someone to collections when you are making payments? Should I continue making these payments? I do plan on finding a lawyer but I was always told if a company accepts your checks as payment then collections were not involved.
You can work around the care giver designations and authorized bank account signatory if you want.
It is not the case where your making payments will prevent account placement with outside collections.
Do contact an attorney, and perhaps find a consumer law attorney to talk with about bankruptcy. I understand not wanting to file bankruptcy, but it may be the least costly and most rapid way to resolve the medical bills, and maybe even an upside down property.
Thank you!
Yes, they can legally negotiate with her because she is the child’s mother with custody and care rights.
You cannot force them to work out a lower price on this one and given her default I can’t blame them even though it is not your fault. You can reach out to the provider directly and see if they will agree when the collection agency is refusing. They might have some sympathy for you.
Absent that working I would haul mom back into family court for not keeping the insurance intact and defaulting. The family court can hold her in contempt, order her to reinstate the insurance, reimburse you for the unnecessary expense due to her negligence and poor money management, and other penalties as they see fit. If you don’t do this she will continue to take advantage.
Hello, I had to take my son to the hospital after he broke his nose at the baseball field. A couple months later I get an $8,000.00 bill from the hospital and a $900.00 bill from Kids Pediatrics because apparently his mother missed the insurance payment that month which caused a gap in coverage. The bill came to me because i brought him and signed the paperwork at the hospital. She and I were never married and haven’t been together in 5 years but I give her half of the insurance payment in cash every month per our court agreement. His mother contacted the collection agency and negotiated a settlement twice and never paid. I never gave approval or even knew she was contacting them after the fact. When I finally called to try to set up a settlement plan they told me that she already did and defaulted. So they weren’t going to negotiate for those lower prices. When I explained the situation the person said since she is my spouse she could negotiate the settlement. I clarified that she is the mother of my son but we were not ever married. He edited that in his system and told me I should sue her in court if this is the case and gave me the option to make $100.00 payments every month. So my question is can they legally negotiate with her if she is not my spouse and is there something I can do to work out a lower price? They offered her $1,000 the first time but she defaulted. I tried to settle for that price but they refused. Any information is extremely helpful. Thank you in advance.
I live in Va. Have a couple over drafted bank accounts…credit card debt…. 14,000 with hospital bills ….doc bills… etc. I only make 800.00 a month.
Can I be jailed for not paying these bills. Can I be jailed if I cannot afford court cost related to these bills. I am looking to file bankruptcy asap. Do some lawyers help clients who deal with poverty? I really want a fresh start.
You cannot be jailed for the bills going unpaid. If you are sued and ignore a judges order (like showing up for an asset discovery hearing), that can lead to some problems.
Contact a low income legal aid office and find out if you qualify for low or no cost assistance.
If I am sued and have court cost. Can I be jailed if I cannot afford the Cost? I am looking hard to find a bankruptcy lawyer within the area.
I am just really stressed…cannot sleep. I have no criminal background or anything…. it just seems like every bill collector I talk to treats me like crap… I made some bad choices and was young and still am young I just wanna fix all this. There are to many accounts to pay something on all.
Not for the debt being unaffordable, no. But never ignore anything that the court directs you to do.
All of these concerns will be put behind you when these debts are discharged in a chapter 7 bankruptcy. I do not recommend it, but if your chapter 7 is going to be really basic and simple, you can do them on your own. If you are not intimidated by the prospect of that, check out the DIY bankruptcy book published by NOLO Press.
So I am helping my girlfriend to improve her credit score and while we were on there we noticed she had something in collections. It turned out to be when she went to the ER 2 years ago for cut thumb. At the time she thought she had only one bill at the hospital that I took us a month to clear up because the hospital had the wrong insurance on file and we finally got it cleared up after going in and calling around numerous times and her insurance payed 80% and she paid the remainder. Well it turns out they had a second bill through Infinity for the physician cost for the ER that the hospital never told us about after a handful of conversations, and Infinity informed us that the USPS kept returning the bill saying it was undeliverable. Even though the address was her parents that hasn’t changed in 20 years and the other hospital bill, was able to be delivered in the mail just fine.Then they stated they left several messages on her parents home was the only formal contact, but her parents felt they never had no such message.
At this point she has a bill for $709, that would’ve been covered by her parents insurance if they would’ve billed the correct one initially and or actually notified her that there was a second bill so she could pay it. I have obtained a copy of the bill now, and it has her correct address on it so I’m not sure why it couldn’t have been mailed. Also since its two years later, she is to old to be on her parents insurance, and we’ve been told insurance might not pay now since its been longer than a year.
What would you say would be best plan of action if we are trying to protect her credit score and not have to pay as much of the $709 as possible because if it was handled correctly and we were actually notified she would have only paid like $150. Should we seek a attorney, or just pay it off since the amount is so small that paying an attorney would cost just as much?
I would work with an attorney only if the principle of the matter reaches beyond the dollars and “sense” of the matter, as you could easily pay the attorney more than the total of the medical bill.
Whether or not you work with an attorney, I would start off with filing a debt collection complaint with the CFPB. They really care about the medical billing, collection, and credit reporting issues that affect us all. Be thorough in what you include in your collection and billing complaint. You are willing and able to pay, and always have been, but never knew about the debt.
Post an update with the response you get and lets go from there.
I found out today that I am being sought after for a medical debt of over 20K. I was involved in a car accident about 2 years ago where I was found at fault. I carried the insurance required, however did not contain any bodily injury insurance (I live in FL and do carry that insurance now). I received a couple different letters about this debt and contacted the NSB in a timely matter each time, being reassured that the letter did not have any affect. The last letter claimed a loss in my driver’s license if I did not pay, in which I called and was again told to disregard that letter. Today I was left a voicemail from the NSB claiming this debt needed paid and was my responsibility. I was told that it was all from medical treatments, and I had a few different options to clear up the bill including if I wanted to pay it all outright, they can work out a discount? I’m really confused and scared, have no credit established and no debt in any way. I’m also 24, a waitress, barely making enough for my rent. I don’t have the best relationship with any family so really have no means to support, emotionally or monetarily. I guess I’m just curious where to go from here …. Am I truly entitled to this debt or could it be disputed? I’m not really sure of my rights in the case of demanding seeing the bill in its entirety? Any and all timely advice is so appreciated. I was told I had until Thursday to decide options? Thank you again!
You really should be talking over the situation with an experienced consumer law attorney in Florida. Many will offer a no cost consultation to help you get your bearings on your rights and options. This can help tremendously in the decision making process for taking your next step.
I can send you contact details for any attorneys I know of in the area with consumer law practices, just post the name of a nearby larger city, and I will email that to you.
Thank you very much! I live in Fort Myers, FL. I am trying to remain optimistic that I won’t forever be in debt for this simple act, and am merely being taken advantage of in some way. Your time is much appreciated!
I sent you an email with contact details to an attorney nearest you. It would be great if you posted an update with how you progress.
I have noticed the last few times when trying to deal with hospitals they REFUSE to offer any discount on procedudres and make me responsible for the full left over amount after Medicare pays. I had to have a outpatient surgery with the total bill being 800 . I called and spoke with the billing department to be told that I could set up a payment plan on the amount again without any discounts. They refuse to negotiate and the only number they use is the 800 and will not lower that amount. I have really bad credit cause I pay cash and have never owned a credit card, a mortgage, or a car loan. Their “payment” plan does nothing to help my credit and does not show anything to credit bureaus unless I default. What steps do I take to negotiate so that I can get at least a semblance of a discount. I even asked the billing department that I can pay this in full or you can wait the 18 months you are asking me to make payments or I could just pay it all but the hospital refuses to come off 800. Any ideas or suggestions is much appreciated.
Medical service providers, by contract, are often unable to discount services and procedures when a portion is covered by insurance. There is really nothing you can do or say to cause them to want to risk that relationship.
Send the payment (use a money order) via certified mail return receipt directly to the anesthesiology office. If they refuse it bring it to court to show that you made a good faith effort to pay but they refused payment. If they do not take the payment and drop the suit I would fight them tooth and nail over this.
I would also try sending a letter to the attorney stating they are seeking unjust enrichment. The anesthesiologist had a duty to mitigate their damages by determining the correct address which the hospital had far sooner than 2.5 years and still made NO effort to contact you for payment. I would also make a complaint to the Bar Association in your state because to refuse the reasonable settlement of what was owed is unethical. Immediately filing a lawsuit knowing they made billing errors for 2.5 years is unconscionable. If all else fails I would take the refused payment to court and fight to have the court ram it down their throat with no reimbursement for attorney fees or court costs for taking up the court’s time by refusing full payment after all their mistakes.