Curing an overdue medical debt
Dear Debt Adviser,
I have medical bills and I have been paying
monthly payments. But they turned my account over to a collector in
spite of my regular monthly payments. Can they do this? Also, the
collector is charging me interest. Do I have to pay the interest?
Depending on who you talk to, medicine is the highest and noblest
of callings, or it's a business. I think you have been talking to
the latter of the two. I suggest you find a way to get to the former!
In answer to your first question, yes, a hospital
or physician can turn your account over to a third-party collection
agency if you are making smaller-than-agreed-upon monthly payments.
It seems a heartless thing to do to someone who has
been sick and is making every effort to make good on a debt; yet,
hospitals often have thousands of overdue accounts. It is a dilemma
that many community service providers face. Most will want to find
a way to work things out. It's usually part of their public service
nature to do so and I am hopeful that you will be able to work this
out. Sometimes, however, misguided individuals are put in charge
of billings and collections and they can be no better than bullies.
These are, fortunately, the exception to the rule.
I suggest that you call the hospital or physician
and speak to the billing person or department. Explain what has
happened and why. Be ready to offer a payment that you can afford
and represents your best effort to repay the bill. Usually that
will do the trick, unless there is some other complication to the
If you are told that it's too late, or the payment
is too small, ask to speak to a manager and keep going up the chain
of command until you get to the hospital chief financial officer,
or the doctor if the bill is due to him or her. Persistence, sincerity
and a reminder that you are recovering from an illness are usually
effective ways to get the bill recalled from the collector.
Your second question is a little more complicated.
Fair Debt Collection Practices Act states that the following
is an unfair practice: "(1) The collection of any amount (including
any interest, fee, charge, or expense incidental to the principal
obligation) unless such amount is expressly authorized by the agreement
creating the debt or permitted by law."
Look at the agreement you signed when you received
the medical service. If a rate of interest was not specified, adding
interest would be an unfair collection practice according to the
FDCPA. However, some state laws allow collection agencies to collect
interest along with the original debt owed regardless of the circumstance.
California is an example of a state with this type of law.
Check with the Attorney General's office in your state
to inquire if your state has a law that allows collectors to charge
interest on debt obligations. (Visit the National Association of
Attorneys General Web site for a list
of every state's attorney general.) If not, you are not required
to pay the interest and you should report the collection agency
to the Federal Trade Commission for unfair collection practices.
Another quick note about collectors: Do not allow
them to harass you in any way. The FDCPA protects debtors from collection
practices that are abusive, such as threat of violence, use of obscene
or profane language, publication of a debt or placement of phone
calls after 9 p.m. or before 8 a.m.
Abbi, whether you must pay interest or not, I urge
you to continue making monthly payments. If the collection action
progresses to a court action, your ability to show the judge that
you have been doing your best will weigh heavily in your favor.
Take care of yourself.
The Debt Adviser, Steve Bucci, is the president
of Consumer Credit Counseling Service of Southern New England. Visit
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