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.
I live about 50minutes drive from Indianapolis, IN.
If you could help locate some Attorneys that are pro bono towards my case, I would really appreciate your help. I would definitely try to talk to the attorneys before reaching out to the hospital as you advised. Thank you so much again for taking your time to help me out.
I do not know any pro bono attorneys in Indiana for this type of issue. I did email you a list of attorneys who may be able to refer you to someone near you though.
I don’t know any other attorney that would offer free consultation for this matter. I completely agree with you in regards that I really feel that I had a case but somehow always got shut down by the two previous attorney.
No, I have not talked or written to the hospital administration. Should I come talk to them personally or write to them so there is a document as a record?
Where do you live? I may be able to help you with locating a few more attorneys to speak with.
If it were me, I would likely reach out to hospital admin, and first with a precise outline of all that transpired, followed by a desired outcome. But because this has gone this far, I might do a few more attorney consults and ask for their opinion on contacting the hospital.
I have talked with two experienced attorneys. They both said that it would be tough to win my case if I would like to pursue legal action since I would require an expert witness and therefore advised me to just pay the hospital bills or tried to negotiate with the hospital. My problem is that I’m traumatized to go back there after my experience with the hospital from both ER Doctor to the ER nurse.
I would look to speak with another attorney or three. You may still hear the same or similar feedback, but I would want to run the situation by more than just 2.
So you have not spoken with or written to hospital administration?
Hi Michael,
Thank you for your quick response. Here is my situation. Last September I went to the ER because of severe headache from bugs bite. I was prescribed two strong antibiotics and Dilaudid for pain. After taking the meds and the IM injection from Dilaudid I started feeling very dizzy and within 5 minutes experiencing vertigo and losing balance. The nurse ignored what I told her and pressed for a discharge and didn’t even bother to tell the ER doc. She wheeled me out and left me with my mother despite my loss of balance. An hour after I got home, I started having difficulty breathing, gasping, completely loss muscle strength and started puking. When I couldn’t tell my heart beat because I was very weak I asked mom to call the ambulance and when ambulance transferred me I puked two more times. I was so sick that I thought I was going to die because I couldn’t even sign my name and very trouble breathing. Long story short they did a lot of testing and imaging and one of the tests for blood clot was elevated. At the end the same ER Doctor came and admitted she over drugged and over dosed me. I didn’t have any insurance at the time of the admittance so I got a discount from the hospital. I had no issue paying the hospital except for the fact I absolutely felt they almost killed me and led me to having to come back to the ER the second time from the over dosing and over drugged me that ER Doctor made a mistake the first time I came in for the headache and cellulitis. That’s why I refused to pay for the high bill due to the second time came back to the ER all in one night and within an hour from the first discharge. The total hospital bill from every departments was around 6K. I now have multiple collectors agencies contacting me for different portions of the total hospital bill.
My questions for you are:
1. what are your thoughts?
2. What do you think I should do?
3. What’s the likelihood the collector agencies will take me to court?
My main collector agencies is Premier from Indianapolis, IN. Thank you for your time and for your help. I greatly appreciate you.
Have you talked with the hospital administration about your billing and treatment concerns?
Have you talked over your concerns with an experienced attorney?
What were the results of those communications if you had them?
I would do both of those things if you have not yet.
People are sued over unpaid medical debts. It is a real concern, but the mistreatment you received, if as you described, should win the day (help produce a favorable outcome).
Hi Michael I got a summoning for court for my medical bill and it’s my first time any advice for me or anything that can help me
How old is the debt, and how much is it?
What state are you in?
Who is suing?
What is your goal to resolve the debt?
It’s year old and it 5000 dollars . I’m from Wisconsin it the central Wisconsin anesthesiology that during me. The goal is to get a payment plan going n get th of my back
How much can you afford to pay monthly? You can talk with them and if they are willing to accept what you can afford, be ready to sign off on a consent or stipulation to judgment.
What if they agreed to take less than that in a lump sum settlement? This would potentially allow you to avoid any judgment, or risk of judgment.
I was in the er last year and have a medical bill of$700 which got sent to the collection agency i have making payments of $25 since December. I recent applied for a credit card due to having to have more surgery in april and wanting extra income to pay the deductible. Today the collection agency contacted me and told to that since i have card credit now i can pay them otherwise they will take me to court my question is the collection agency able to check my credit report often without my permission and not let me know and is that an invasion of privacy through the credit bureau
Most debt collectors have real time access to your credit reports, and they definitely are paying attention to what happens with them in order to use that information to collect from you.
It is not considered improper.
Hi Michael!! My son had two surgeries in about a years time and accrued about 9000.00 in medical bills, he has finally got a job and an apartment, proud of him that way, but he neglected to try and pay off medical debt, and now a a letter to sue and came to him with a court date, he didn’t goto court, don’t know what action they will take yet. He lives in Minnesota. Question, can bill collector for Fairview hospital garnish his wages for the 9000.00 dollar debt, and if they can what can he do if he doesn’t make enough to live on right now??
Once a garnishment is in play he will have the right to contest that formally through the court. He will want to act on that immediately. If he qualifies for partial or full exemption the court will protect his wages.
After a garnishment fails is often a good time to negotiate a settlement.
I have $38,000 in unpaid hospital bills. Mostly consisting of when I was a baby and too young to know I was an abandoned child in Florida. How do I settle my hospital bills if I am a ward of the court. I am now 26. I dont know if the law still continues at that age. I also went to school but was going through hardships and need help paying my school loan debt of only $4,000. I would like to some day return to school open-minded and debt free to continue my nursing degree. Please give me some advice.
How long ago were the medical debts bills incurred, and how old were you at the time?
My family has incurred a lot of medical debt due to 3 different types of therapy for my son’s autism. We had monthly bills come in from the local health system where he was getting his therapy, and i missed one somewhere along the line and it got sent to collections. The health system then sent the entire bill to collections, which totals over $13,000. I had to quit work to take my son to his appointments, so we were down to 1 income. We were making monthly payments to the collection agency, and it has never shown up on our credit report. A few months ago, when i got my statement from the collection agency, there was only $10,000 left on the bill. I then received a bill from a second collection agency for the other $3,000. So now i have to pay 2 different bills to 2 different collection agencies. We have been told that the health system will not allow them to settle debt under any circumstances. Is it legal for them to split a portion of the bill and send it to another collection agency when we’ve been paying on it religiously?
I would not think the partial reassignment to a different collection agency is illegal. I see one variation or another of that happen all the time. But you shoudl speak with an experienced debt defense attorney in your state to get a legal question like that answered.
Medical debt collectors and billing departments are often precluded from settling for less than what is owed if a portion of the bill has already been covered by insurance. Giving the insured a discount when the insurer did not get one, having already met their obligation, is often not allowed per their contracts.
I was brought to the ER a year and a half ago, I almost died, was in a coma for a week. My health insurance was not very good. I now owe roughly $7,000 to hospital, and doctors. I had a long term disabiity policy from work which paid me from February 2015 to December 2015. I applied for SSDI and received a Fully Favorable Decision on October 28 of 2015. I received my lump sum payment from SS in the beginning of January 2016. My Disability Company now wants me to pay back over $15,000. It was my understanding that I only had to pay back the months since my hearing which was October 2015. Because of my long term disability and spending 5 weeks in hospital and physicial rehabilition I had mounting bills. I used alot of the “back pay” from SSDI to pay those bills and get caught up. My question is what to do now. I asked if I could make payments as I don’t have the entire $15,000. That is $1,000 more than my award was anyway. They said I had TEN months to pay the entire amount, which is impossible. The said they would send my account to collections. What exactly does that mean. I am already offering to give them monthly payments just not the amount they are asking. What will happen to me?, aside from my credit taking a hit, which it already has since I have all of those medical bills in collection already.
Not much more will happen to your credit if you already have all those bills showing as collection accounts. And your credit will improve as you resolve the medical bills one by one.
How much can you afford to pay each month if not 1k?
I’m expecting to lose so is it normal for them to levy bank accounts? Or will they just order wage garnishment ? Or will they work with me on a payment plan? What typically happens once judgment is made ?
If you can get a payment agreement set up you can avoid garnishment of bank levy. Be sure to get everything in writing. You may end up getting the flexibility you need right at the court house if you cannot structure anything prior.
I have a court date set for 2/1/16 for medical bill of originally $1400 now after interest and fees $2900. Like many others, the collection agency is trying to squeeze blood out of a turnip. I do not have savings, nor do I have family able to help me with a lump sum. I could possibly afford $100/mo at most. At this point, is it best to just wait until court judgement to work out payment plan , or should I contact the collection agency / attorney to see if they would accept $100/mo? I live in Washington state and it sounds like they can garnish up to 25% of my wages and I couldn’t survive on the remaining income. If I should call to work out a payment plan to avoid court , do I call the attorney directly or the collection agency he’s representing?
You typically have to work out the details with the attorney now that he/she has brought a collection action in the court. Be prepared to agree to consent or stipulate to a judgment in order to get the monthly payments you need.
I had surgery back in 2013 I thought the whole surgery was covered and now the doctor is bringing me to court to pay the balance of $1,400.00 there’s no way I can pay this amount all at once it’s now 2016 and my hearing is scheduled for this coming Thursday do you think the judge can lower that amount? Please advise!
The judge is not going to lower your medical bill without evidence to support that decision. Your not being able to afford to pay it is not an actionable reason to the judge. You could look to set up some type of affordable monthly payment while in the court process, or settle the bill for lower than the amount they are suing for.
Settling will help to prevent a judgment, where a monthly payment plan could find you with a judgment, or having to stipulate or consent to one.
I currently have three accounts of unpaid medical bills each around 100 from different third party debt collectors all our from different hospitals in the state of Arizona where I am currently and the unpaid medical bills are about 4 years old my question is can anyone of those unpaid medical bills agency sue me ? I want to start a saving account but I am afraid my money will be taken away
I do not anticipate lawsuits for debts around 100 dollars. If one were to occur, you would typically be served and able to resolve the debt before a judgment entered (the judgment enables the bank account levy).
You can also look to be proactive and resolve the debts one by one, while still opening your bank account today.
Girl who fell off her horse. And by the way he stepped on my head. I would not go to emergency if i just fell off.
Can I pay original creditor in full.. skip Collection Agency?
Hi Lisa – It was good to speak with you about your situation yesterday. You did leave off the head stepping when we spoke. Ouch!
Yes, you can often circumnavigate dealing with the outside debt collector by dealing directly with the service provider, or their medical billing company. I recommend it often. It may be harder to do with some of the debts we covered last night that are as old as they are. It is worth a shot though, and I will still want receipts and documentation as necessary.
Michael,
I am a 21 years old and have a total of $21,000 in debt collections; all medical bills. I have been unemployed for basically my whole life, due to repeated medical problems and disability and I am in dyer need of some guidance. I have no family besides my mother whom is in no situation to be able to lend me anywhere near even 50% of what is owed to “settle”. Not being able to buy myself a vehicle nor qualify for rentals because of this medical debt is the most belittling thing. I suffer from seizures, a sever panic disorder/social anxiety and minimal PTSD so you can see where its very hard for me to keep jobs, no matter how hard I work to stick it out. I just don’t see any possible way to be able to “settle” so much money, especially anytime soon; when needing at least OKAY credit is very important at this time in my life. Please, if you have any ideas, I would appreciate it immensely. The last thing I want, is to have to file bankruptcy at age 21. Thanks much!
Sage Winter
Sage – Sometimes bankruptcy is the option of first resort and something to run to, rather than away from. Your comment suggests to me that your goals and needs are consistent with at least talking to an attorney about chapter 7. Review this article about finding a bankruptcy attorney and then call a couple of attorneys.
My husband had 3rd degree burns after a kitchen fire and had to go to ER and was referred to burn center in our state – our insurance paid out of network and we owe over $15,000 to the burn center. I have tried getting financial assistance, working with the billing department and even appealed the decision with my insurance company (which was denied). I make $60/month payments on 6 different accounts to the medical bills and they are wanting us to pay almost $500/month (which we surely can’t do) now I got a letter from an attorney where they are going to sue us for the total.
What can we do? The insurance company should have paid in network – we were referred to the burn center and now we are getting penalized for seeking medical care that we had no choice to get. I don’t know what to do.
Hi.
I have a bit of a complicated situation regarding medical bills. I live in GA and went to the ER in April of this year for a severe allergic reaction. I am 20 and covered by my parents’ awful insurance that has a $6000 deductible (insurance never paid a single cent).
I received 3 bills. One from radiology for under $100 which I paid. One from the doctor’s group for $1200 (adjusted to $800 by insurance). One from the hospital for $6000 (adjusted to $3400 by insurance).
1) I never saw the doctor bill since I was away at college and my parents did not see it, so it went to collections. It has been 3 weeks since then. I saw a call I missed (collection) but did not answer. Can I still pay the doctor directly and ask them to delete the account/debt?
2) I hold the hospital responsible for all but $2000 of their debt as well as half of the debt I owe the doctor as a result of their negligence (I have proof and a witness). I submitted a dispute letter a month ago and have called to follow up, but they say it is processing. If they will not lower the amount I am responsible for, do I have any options besides letting it go to collections?
I have no income, assets, or savings. My credit rating is average and probably about to tank because of this whole deal. My parents say a lawyer is not a good way to go because his/her fee could easily exceed the bill amount.
Thanks in advance.
I would wait for the outcome of the dispute before doing anything. That would change the amount you owe, and it could give you an increased ability to get thisback in the hands of the service providers billing desk too.
Post an update with the outcome of the dispute and lets go from there.
I live in CA and I had a medical bill go into collections in 2010. I got into contact with the collection agency and they gave me two options: either start to make monthly payments, or settle on one lump sum. the debt will continue to increase off of interest until i pay it off. The amount I owe is around $3,500 but its still more than i can afford right now.
Would it be better for me to start working on making monthly payments? Or should I wait for it to fall off in the next year and a half?
I would first consider what credit and finance goals I have in the next 2 years. If a home loan or refinance were something I was hoping to accomplish, I would look to negotiate a lower lump sum pay off on the medical bill, and any other unpaid debt on my credit reports. I would not want to set up monthly payments as that may not help me reach my goals and would likely reset the SOL to sue if I were unable to keep up the monthly payments.
If not trying to improve credit to make a major purchase I would probably wait out the credit reporting,
I got in a serious car accident back in Jan of 2013. I was in shock had extreme chest pain, and back pain. My local ambulance took me to the main hospital. I knew I had medicaid coverage then. But I recently received a paper saying a debt collector was suing me for the ambulance charges of $1220. I never received any bills for the ambulance before and all of a sudden I’m getting sued. So I called the medicaid reps confirmed my coverage of that date, then I called the billing dept they submitted the claim of $1220, even though it was past the 12 months time, but I informed them I was mentally unstable and in shock. I’m waiting for a response for them in the mail. Then I briefly called the debt collector to dispute the charges,said I am working on disproving them. I’ve have not responded to the small claims. I don’t like leaving my house and had a serious depression were I could not get out of bed..Isn’t it the ambulance providers responsibility to submit the claim to the medicaid team? What can I do to assure I get the charges covered by medicaid even if it’s been 2 yrs? Do I just show up with the medicaid papers at court? I want to sue them back for time wasted. It’s not right. Personal note: I have agoraphobia ever since the accident, and have no means of transportation. I am willing to fight back but I feel stuck
You should show up and challenge the claim in small claims. Be prepared to the degree necessary with all documentation. Have a record of dates, times, and names of people you spoke to regarding the insurance coverage, and calls to the debt collector too. In other words,it helps to put together a chronology of events both then, and since learning of the collections.
What state are you in?
Do you have a set hearing date?