Account in collection

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Hi,

I am regular visitor of fatwallet, but never had an account. I needed some help and hence created an account just now.

Close to 2 years back, I was employed and was pregnant. Right around my pregnancy due date, a lot of people in my company was laid off and I was part of it. Now I went into my pregnancy without an insurance since it was from my work. Now, after delivery with no job and no insurance, I had a bunch of bills coming from my hospital visit. I would not like to go into details of my personal issues, if it is ok with you guys,  so I would just say that I did not have anyone who could provide financial support during this period. I ended up diggin into my savings to pay the bills. I will be honest that I was a bit overwhelmed with everything that was happening in my life at that point. And I did miss out on a 2K bill (I belive it was for anesthesia, I dont remember) to be paid on time, due to one of the facts that I needed more time to arrange for it. The hospital quickly moved it to the collection department and I mostly ignored it at that point because - 1. I did not have the amount with me and 2. I was too much impacted (with post partum and all, and being plain stupid I guess) with everything.
 
So now it has gone into collection, I get regular mails from the collection folks and calls that I do not attend since I am afraid!! The bill due is now about 2.5K as per the collection company.

Now, it is my mistake and it is something that I should be paying for the service I have availed. However, given my current financial situation, if I can get it settled for much lesser as I see discussed a lot in these forums, then I would like to do that. It would be great, if I could get some recommendations on this. With my kid around 2 years now, I would like to get back to working full time. However, one of the impacts to this is my background check which shows up the collection on my account. I believe I was rejected from one of the job openings due to my background check. So, I would also like to get my history cleaned up as part of the settlement too.

Any ideas and suggestions would be greatly appreciated. God bless.

Note: Hope I am not breaking any rules with such a big message!!

Member Summary
Most Recent Posts
Sorry, I am confused RW01.. Isn't the bureau reporting based on the FCRA act? So, how is this different?

If it is ok with... (more)

sumara (Aug. 01, 2016 @ 4:35p) |

Yeah, its confusing. Credit bureaus (CRAs) report information only, they have nothing to do with collections (CCAs). C... (more)

RedWolfe01 (Aug. 02, 2016 @ 11:10a) |

hmm.. I think I got it... anyways, thanks for taking the time to explain. appreciate it.

sumara (Aug. 02, 2016 @ 2:31p) |

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the best advice is to go to credit boards medical billing. there is a procedure there to follow exactly which may erase/reduce your debt and clean up your report. they are very helpful.

I assume it's too late for your case, but it sounds like it would have been a perfect time to pay for continued insurance with COBRA payments for a month or two. I remember the maternity bills before & after insurance arrangements - something like 90% discounts (a long time ago).

I agree creditboards is the best resource to figure out what to do next.

On the credit board, follow Whychat's medical dispute process.

Thanks to all. I was not aware of the creditboards site. Has a lot of information. I will look into that forum.

It can be stressful and overwhelming to be scared every time the phone rings and the mail comes --
I hope you are able to quickly get it sorted out and repair your credit.

Thank you Oppidum. You have rightly captured my feelings. I feel afraid, pathetic, shameful and guilty!! I hope I get out of this mess asap with as little impact as possible!!

Whatever you do, don't go on a payment plan or accept the Collection Agency's offer to settle for less than full amt without having them agree in WRITING to delete the Collection account from your credit report. Get it in writing before you give them a penny. Also ask them in writing not to contact you by phone. Tell then, USPS correspondence only. That should prevent their phone calls quickly. Also make sure all written communication is with certified mail, no need for return receipt. The certificate of mailing and online print out of the mail delivery proof is sufficient for any legal reasons.

ach1199 said:   Whatever you do, don't go on a payment plan or accept the Collection Agency's offer to settle for less than full amt without having them agree in WRITING to delete the Collection account from your credit report. Get it in writing before you give them a penny. Also ask them in writing not to contact you by phone. Tell then, USPS correspondence only. That should prevent their phone calls quickly. Also make sure all written communication is with certified mail, no need for return receipt. The certificate of mailing and online print out of the mail delivery proof is sufficient for any legal reasons.
  
Totally agree here.  Whatever you agree to, get it in writing!!!  And best wishes to you in the future!!! 

It's a couple of years too late to help you, but I'd like to suggest for anybody else reading this:

If you lose your job while pregnant, BUY COBRA INSURANCE NO MATTER WHAT.

If you rack up a hospital bill while unemployed, go straight to the hospital's charity department and lay out your budget.

Thank you ach1199 and raceman73. I am afraid to contact them yet since that seems to be the recommendation from few of the forums. It kind of resets some cycle apparently. However, whenever I do, I will make sure I do everything in writing. Thanks a lot for the suggestion.

Thank you taxmantoo. I wish I had reached out earlier. Like you said, at least this will help someone who goes through my same situation in the future.

What they mean with the reset is if it were outside of the statue of limitations (which doesn't apply to you) or if it were about to fall off your credit report, even if you paid them just a DOLLAR, it would make it a valid debt again and it resets the statue of limitations, so it could be on your credit for another 7 years.

taxmantoo said:   It's a couple of years too late to help you, but I'd like to suggest for anybody else reading this:

If you lose your job while pregnant, BUY COBRA INSURANCE NO MATTER WHAT.

If you rack up a hospital bill while unemployed, go straight to the hospital's charity department and lay out your budget.

  Too late for OP now but for others, know this; one thing special about COBRA is that you can actually wait 60 day before deciding on getting it.
You have 60 days after you lose your benefits to elect to pay for COBRA coverage. However, even if you enroll on Day 60, your coverage is retroactive to Day 1. Of course, you’ll have to pay the retroactive premiums for that period. Thus, you could technically waive your COBRA coverage initially, and then wait to see if you incur any medical bills. If you manage to get on a new health plan on Day 30 or Day 55 with no medical bills, then you’ll still be guaranteed full coverage going forward and you won’t have paid anything during your gap. If you can’t find new coverage within 63 days or rack up medical bills higher than the premiums, then you can rescind your waiver and retroactively activate your COBRA benefits. Effectively, you get a do-over.

raceman73 said:   What they mean with the reset is if it were outside of the statue of limitations (which doesn't apply to you) or if it were about to fall off your credit report, even if you paid them just a DOLLAR, it would make it a valid debt again and it resets the statue of limitations, so it could be on your credit for another 7 years.
  Ah.. that makes sense. Thank you.

on a complete side note, if you had submitted paperwork for medical/FMLA leave, you might want to explore the legality of them laying you off - meaning I don't think legally they can - they have to make sure you are employed during leave and have a similar position for you when you return. but, that would only be if you'd already submitted paperwork I think?

alwayslookinaround said:   on a complete side note, if you had submitted paperwork for medical/FMLA leave, you might want to explore the legality of them laying you off - meaning I don't think legally they can - they have to make sure you are employed during leave and have a similar position for you when you return. but, that would only be if you'd already submitted paperwork I think?
  

One of many facts missing here. 

OP:  Did you do that? 

 

raceman73 said:   What they mean with the reset is if it were outside of the statue of limitations (which doesn't apply to you) or if it were about to fall off your credit report, even if you paid them just a DOLLAR, it would make it a valid debt again and it resets the statue of limitations, so it could be on your credit for another 7 years.
 

  
Wrong statute of limitations.
All sorts of weird things can reset statute to sue, even a promise to pay can do it in some states, but statute of limitations for reporting can only be reset by bringing the account current and defaulting on it again. The Date of First Delinquency triggers the statute to report, and that date's set in stone.

Mickie3 said:   
alwayslookinaround said:   on a complete side note, if you had submitted paperwork for medical/FMLA leave, you might want to explore the legality of them laying you off - meaning I don't think legally they can - they have to make sure you are employed during leave and have a similar position for you when you return. but, that would only be if you'd already submitted paperwork I think?
  

One of many facts missing here. 

OP:  Did you do that? 

 

  I unfortunately did not do it. At least officially did not. I had discussed about the plans with my manager. However, we decided to apply for the leaves as much as close to the delivery date so that I can get more leaves after the delivery date. We had 3 weeks of maternity leave. So, yeah I never officially applied for the leave in their system.

taxmantoo said:   
raceman73 said:   What they mean with the reset is if it were outside of the statue of limitations (which doesn't apply to you) or if it were about to fall off your credit report, even if you paid them just a DOLLAR, it would make it a valid debt again and it resets the statue of limitations, so it could be on your credit for another 7 years.
  
Wrong statute of limitations.
All sorts of weird things can reset statute to sue, even a promise to pay can do it in some states, but statute of limitations for reporting can only be reset by bringing the account current and defaulting on it again. The Date of First Delinquency triggers the statute to report, and that date's set in stone.

  Sorry, I did not completely get it. Is there any impact for me due to this? Any reference which I can look up?

What state are you in?

What state was the healthcare provider(s) in?

I am in Washington state. The provider is Cigna. So, I believe they are in CT.

sumara said:   I am in Washington state. The provider is Cigna. So, I believe they are in CT.
  

Looks like WA state has a SOL of 6 years on the debts.  http://www.bankrate.com/finance/credit-cards/state-statutes-of-l...



 

Thank you Mickie3.

Here is what I understand:
1. I cant be sued after 6 years. However, I can be sued like right now since I owe someone some money (well 2K + interest) and I am not responding to their efforts. So, they dont know whether I intend to pay back.
2. Irrespective, this continues on my credit history (at least for the next 5 years or so). This impacts my full time job search.

I am still going through creditboards. But the whole thing is so confusing (atleast for me)!! Too much information brings in more confusions.

Quoted and repeated for emphasis.  

This is a HUGE (said in a Bernie Sanders / Donald Trump voice) deal for people, especially those with spouse and/or children changing jobs.  IANAL, but what Zen lists is my understanding after going through this twice.  I didn't ever have to use Cobra (I just went without health insurance for a month) when I changed jobs, but knew I could sign up for it in arrears if any of my family had an accident, bad medical condition, whatever.  I could have handled the full Cobra payments if needed, but for many, the full Cobra bill would be a large burden.  A large burden that may not be necessary unless it is really needed, which then becomes an incredible bargain if actually needed. 

ZenNUTS said:   
taxmantoo said:   It's a couple of years too late to help you, but I'd like to suggest for anybody else reading this:

If you lose your job while pregnant, BUY COBRA INSURANCE NO MATTER WHAT.

If you rack up a hospital bill while unemployed, go straight to the hospital's charity department and lay out your budget.

  Too late for OP now but for others, know this; one thing special about COBRA is that you can actually wait 60 day before deciding on getting it.
You have 60 days after you lose your benefits to elect to pay for COBRA coverage. However, even if you enroll on Day 60, your coverage is retroactive to Day 1. Of course, you’ll have to pay the retroactive premiums for that period. Thus, you could technically waive your COBRA coverage initially, and then wait to see if you incur any medical bills. If you manage to get on a new health plan on Day 30 or Day 55 with no medical bills, then you’ll still be guaranteed full coverage going forward and you won’t have paid anything during your gap. If you can’t find new coverage within 63 days or rack up medical bills higher than the premiums, then you can rescind your waiver and retroactively activate your COBRA benefits. Effectively, you get a do-over.

  

sumara said:   Thank you Mickie3.

Here is what I understand:
1. I cant be sued after 6 years. However, I can be sued like right now since I owe someone some money (well 2K + interest) and I am not responding to their efforts. So, they dont know whether I intend to pay back.
2. Irrespective, this continues on my credit history (at least for the next 5 years or so). This impacts my full time job search.

I am still going through creditboards. But the whole thing is so confusing (atleast for me)!! Too much information brings in more confusions.

  

IIRC, you cannot be sued after 6 years, but you can be sued and a judgement can be had against you before that 6 year SOL is up.  In most states, that judgement can be renewed as long as they want to go for it, with their hopes you get a job (they can garnishee your wages), you win the lottery, etc. 

As a practical matter, for the amount you are talking about, I don't know of a lot of companies that would go to all that trouble.  You should be able to talk to them, tell them the situation, and make an offer of settlement for 10% or less.  DO NOT pay them a cent unless you get in writing that paying will be considered "paid in full", that is, they will come after you again for full amount.  There should be more info on what all to do on that other site, but that is it in a nutshell.

 

Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  

If you have it to pay them, offer them $200 ~ 250 for "paid in full" status.

 

sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  Send them this:

"I dispute this alleged debt. Please provide strict proof thereof within 30 days pursuant to the FDCPA."

If they validate the debt, offer 5% to settle in full and delete any credit reporting of this account. 

Mickie3 said:   
sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  

If you have it to pay them, offer them $200 ~ 250 for "paid in full" status.

 

  I should be able to arrange for that much. However, as I mentioned in my first post, any lesser expense is great for my savings.. at least until I can get back on my feet.

alamo11 said:   
sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  Send them this:

"I dispute this alleged debt. Please provide strict proof thereof within 30 days pursuant to the FDCPA."

If they validate the debt, offer 5% to settle in full and delete any credit reporting of this account. 

  Thank you Alamo11. I assume I need to send this on tracked USPS mail like someone mentioned earlier.

sumara said:   
alamo11 said:   
sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  Send them this:

"I dispute this alleged debt. Please provide strict proof thereof within 30 days pursuant to the FDCPA."

If they validate the debt, offer 5% to settle in full and delete any credit reporting of this account. 

  Thank you Alamo11. I assume I need to send this on tracked USPS mail like someone mentioned earlier.

  

Definitely use certified mail, return receipt (they sign and you get a copy back of their signature.)  If you don't do that, you cannot prove you ever sent it if it gets "lost."

 

Mickie3 said:   
sumara said:   
alamo11 said:   
sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  Send them this:

"I dispute this alleged debt. Please provide strict proof thereof within 30 days pursuant to the FDCPA."

If they validate the debt, offer 5% to settle in full and delete any credit reporting of this account. 

  Thank you Alamo11. I assume I need to send this on tracked USPS mail like someone mentioned earlier.

  

Definitely use certified mail, return receipt (they sign and you get a copy back of their signature.)  If you don't do that, you cannot prove you ever sent it if it gets "lost."

 

Signature Confirmation works better unless you have a legal reason that specifically requires CRRR.  The signature with the pink Signature Confirmation tracking stickers is completely digital and can be downloaded as a PDF sent directly to your e-mail if you request it on the postal website.

Often, the green cards getting returned for CRRR letters tend to get lost or discarded, particularly if delivery happens to a business office on a Saturday or if there's a substitute carrier on the route any day of the week.

I'm not sure, but I believe Signature Confirmation can be added to letters already getting the full CRRR treatment.  The whole thing is very redundant, but if it's so important that you absolutely NEED a signature for proof of delivery, redundancy is your objective.

Mickie3 said:   
sumara said:   
alamo11 said:   
sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  Send them this:

"I dispute this alleged debt. Please provide strict proof thereof within 30 days pursuant to the FDCPA."

If they validate the debt, offer 5% to settle in full and delete any credit reporting of this account. 

  Thank you Alamo11. I assume I need to send this on tracked USPS mail like someone mentioned earlier.

  

Definitely use certified mail, return receipt (they sign and you get a copy back of their signature.)  If you don't do that, you cannot prove you ever sent it if it gets "lost."

 

  Got it.. thank you.

DTASFAB said:   
Mickie3 said:   
sumara said:   
alamo11 said:   
sumara said:   Thanks again Mickie3. Ideally they should be suing me if I dont respond within that 6 year term.

In any case, when you say 10% or less, for 2K are you suggesting to offer settlement for 200 or less, or 1.8K or less?

  Send them this:

"I dispute this alleged debt. Please provide strict proof thereof within 30 days pursuant to the FDCPA."

If they validate the debt, offer 5% to settle in full and delete any credit reporting of this account. 

  Thank you Alamo11. I assume I need to send this on tracked USPS mail like someone mentioned earlier.

  

Definitely use certified mail, return receipt (they sign and you get a copy back of their signature.)  If you don't do that, you cannot prove you ever sent it if it gets "lost."

 

Signature Confirmation works better unless you have a legal reason that specifically requires CRRR.  The signature with the pink Signature Confirmation tracking stickers is completely digital and can be downloaded as a PDF sent directly to your e-mail if you request it on the postal website.

Often, the green cards getting returned for CRRR letters tend to get lost or discarded, particularly if delivery happens to a business office on a Saturday or if there's a substitute carrier on the route any day of the week.

I'm not sure, but I believe Signature Confirmation can be added to letters already getting the full CRRR treatment.  The whole thing is very redundant, but if it's so important that you absolutely NEED a signature for proof of delivery, redundancy is your objective.

  Thank you DTASFAB for the information. Did nto know about this option. I will definitely consider it.

To be a bit more clear about how reset works -- if you do anything that can be considered "new activity" then the 7 year period before it drops off your credit file is moved to the last activity date. So if they ask for some some "good faith payment" or you confirm the debt in writing then it resets the 7 full years.

Basically once something goes to collections they get nothing until they agree to remove it in exchange for payment. I had a few say "we don't do that" and so I let them start aging towards the 7 year mark.

Eventually someone who is more of a bottom feeder buys the paper from the original company and they are more willing to deal. Basically you are likely not paying the medical company, so don't feel guilty. They (the provider) most likely sold the debt for some amount already. AS it gets older it becomes less "collectable" and its cents-per-dollar rate goes down. A CCA may buy "fresh debt" at 10 CPD from the medical provider, and sell it on a few months later for 7 CPD if they think they can't collect quickly. As it is sold for less each time the amount needed to "settle" it goes down accordingly.

Note that medical debt no longer affects scoring as badly (or at all, the scoring formulas are not disclosed) as it did in the past.

It has been a long time since I had to deal with these guys. Feel free to hang up on them, or bounce their number to voicemail. They deserve it.

---

Sometimes the CCA is representing the original debt holder, and those are the ones that rarely take reduced payments or want to remove the debt from the credit file. Verizon (the last company I had a collection account with 10 or more years back due to a missed address change notification) likes to use those -- eventually they moved it to another agency and I was able to pay it for removal. It was low enough I just paid it versus settling -- I mainly wanted it off my file.

RedWolfe01 said:   if they ask for some some "good faith payment" or you confirm the debt in writing then it resets the 7 full years.
Does a written offer to pay X% of the original amount in exchange for a full delete constitute a confirmation of the debt?  Does it matter how it's worded or if there's an explicit denial of liability included?

For example, would the differences in following two statements have any bearing on whether the seven year clock resets upon making the offer?  Assume the collection agency has already sent some validation in response to the initial letter of, "I dispute, please validate."

(1)  My purpose in writing this letter is to make a formal offer for a full and final settlement of this debt in the amount of $XX.XX.

(2)  I do not recognize this debt and I deny liability for the disputed amount, but in the interest of making this problem go away, I'm willing to settle for the amount of $XX.XX.

DTASFAB said:   
RedWolfe01 said:   if they ask for some some "good faith payment" or you confirm the debt in writing then it resets the 7 full years.
Does a written offer to pay X% of the original amount in exchange for a full delete constitute a confirmation of the debt?  Does it matter how it's worded or if there's an explicit denial of liability included?

For example, would the differences in following two statements have any bearing on whether the seven year clock resets upon making the offer?  Assume the collection agency has already sent some validation in response to the initial letter of, "I dispute, please validate."

(1)  My purpose in writing this letter is to make a formal offer for a full and final settlement of this debt in the amount of $XX.XX.

(2)  I do not recognize this debt and I deny liability for the disputed amount, but in the interest of making this problem go away, I'm willing to settle for the amount of $XX.XX.

  
Normally its a payment plan (whether you make a payment or not) -- where you sign something.  

Thank you DTASFAB for that question. That was a good question. Did not think of reframing questions to make sure there is no impact.

Also, thank you RedWolfe01 for the wonderful explanation. Lots of good information again. My collection agency has been the same for the last 2 years (from the beginning). They call me once a month and mails me once a month. And the interest on the due amount goes up each month (about $500 till now).

I did have a question though. taxmantoo above seems to imply that the 7 years on the credit report does not reset on queries. Only the limit for sueing gets reset this way. Or did I get it wrong?!!

sumara said:   Thank you DTASFAB for that question. That was a good question. Did not think of reframing questions to make sure there is no impact.

Also, thank you RedWolfe01 for the wonderful explanation. Lots of good information again. My collection agency has been the same for the last 2 years (from the beginning). They call me once a month and mails me once a month. And the interest on the due amount goes up each month (about $500 till now).

I did have a question though. taxmantoo above seems to imply that the 7 years on the credit report does not reset on queries. Only the limit for sueing gets reset this way. Or did I get it wrong?!!

  
Pretty much everything is based on the last activity date.  Just watch for them using artificial events to reset it, like transferring it to a new company -- or moving it from collections to a write off.  IT has been well established in court that they cannot re-age (another term for reset) the account unilaterally.  YOU have to do something, that they can DOCUMENT.  Inquiries are not sufficient to re-age, one of the more legitimate CCAs I dealt with 20 years ago was willing to reduce the principle and were very reasonable about a payment plan --but you WERE going to sign an agreement to get it.  (that was Great Lakes as I recall, not sure they are still around)  Mine was all credit card debt after college and I was actually trying to pay it off versus having it written off.

Think about it this way, I have current accounts that are older than 7 years old..  so it can't go back to anything but last activity.

Good luck, at that low of an amount you can let them stew -- I don't see them moving to judgement.  DO write them and tell them to use mail only though, and if they call you after that you can legitimately go after them for violation of collections law.

Skipping 8 Messages...
hmm.. I think I got it... anyways, thanks for taking the time to explain. appreciate it.



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