PLEASE help w/ clearing up debt!
Find a Conversation
| Tue, 06-14-2005 - 3:53pm |
Hi everyone. Ok here is my problem. I have come into some money and would like to clear up some debt and help repair my credit report but REALLY need some good advice. I have 5 bills showing in collection and past due on my report (i obtained a report online for all three bureaus). 3 are credit cards, 1 is a dental bill and one is a hosp emergency room bill from 1997. the three credit cards are showing to be in collection for WAY over the amount i spent because i wasnt able to pay anything for so long and the interest had built up. Do i pa this full amount or accept a lesser fee as a charge off? How does a charge off as paid look to other creditors in the future? Also, some 1 of them is saying its already closed as a charge off! Looks like they decided to do away with trying to collect the money from me? What should i do about that???
The Dental bill is more recent so i will just pay that
The last thing in on there is a hosp bill for an emergency room visit back in 1997 however it says opened in 2000. this is bill is not fair because i was insured at the time thru blue cross and while in the ER I told the nurse i had the insurance but no card on me. She said no problem but then marked me down as self pay. then years went by without me knowing this. i never recieved a bill or anything. then my credit report was pulled a few years back and there it was. I have sent letter to the hosp & insurance co.

Hello and welcome!
First, regarding your hospital bill. Based on what you are saying, I recommend you do *not* pay anything on the hospital bill at this time. The seven years issue is seven years from the last time there was activity on the account. By paying on the account you will "re-age" it, meaning that it will stay on there for seven years from your most recent payment.
Furthermore, by paying it, you imply liability for it, and you don't want to do that. Your next step will be to challenge the bill with the credit reporting agencies. If you state that the account is not yours, they have thirty (or sixty?) days to investigate, and if the creditor cannot provide written proof of the account and amount due, etc., then they are required to remove it from your report.
Here is what to do: get the contact information for the three credit bureaus (experian, equifax, and transunion). Send each a certified, return receipt letter (this will cost about $5 each) including the account number in question. You do not have to give them the details, and in fact it is best if you make no mention that you ever had dealings with this hospital at all. Simply state that you are disputing that the account belongs to you, and that you want it removed from your report.
They *must* respond within thirty (or sixty, whichever it is) days to let you know their decision. Keep records of everything, especially the receipts for delivery of your letters and copies of the letters. Most likely, the hospital has long since disposed of the *paper* copies of your bills, and has everything electronic. If this is the case, then they will not be able to provide adequate documentation of your account, and it will simply be removed. It's even possible that the credit bureaus won't even go to the trouble to investigate, and may just take it off your account for the heck of it.
If they do not remove it from your account, then insist that they provide you with copies of the applicable documentation. That way, if you have to contest it in court, you have everything you need to do so.
If contesting it with the credit bureaus doesn't get you what you want (but only after you have received confirmation and documentation that shows that they are not going to give you what you want), you can contact the hospital and insurance again. If it comes to it, send them certified return receipt letters, including documentation if you have it, explaining the situation and insisting that they take care of it.
Most likely, the insurance company will say that they are not responsible because a claim was not filed within their time limits. The hospital will say they are not responsible because you said you were on "self-pay." They will not want to admit, and they will not have documented, that you actually told them you had insurance.
You may have to take them to small claims court.
But, hopefully, it won't go that far. Definitely try the credit bureau route first. Just be sure not to contact the hospital or insurance company again until after you've tried that, because they may use your letter as documentation that the report is correct.
Now, onto the other issues. A charge-off just means that the company has decided they are not likely ever to collect that amount. It does *not* mean that you are not still responsible, or that they may not try to collect on it in the future. They could still sue you. If it's a charge-off, find out (you may have to do some phone sleuthing) who currently holds the account, and talk directly to them. Let them know that you want to get this taken care of and on what terms you are willing to do so.
What you are talking about, in terms of paying less than the total amount owed, is called a settlement. This looks bad on your credit report, and you can end up owing taxes on the difference in amount between what you paid and what you owed (even if you do owe it mostly because of late fees and other related charges). Usually it's not a good choice, but people do do it and it can help if you're in a desperate place. If you choose to go this route, others can give you good advice on how best to do it. Just make sure everything you do is done in writing--I've heard of people agreeing to a settlement by phone, and then the company still trying to collect on the remainder, claiming never to have agreed to the settlement.
Here is what I would do.
I would line up all your bills in a spreadsheet or something similar. Do not include the hospital bill in this, because you are going to try to get it off the record entirely. Go ahead and pay off the dental bill, since it's not behind and you don't want to add it as another bad mark on your report.
Then look at the difference between the amount of money you have and the amount of money you owe.
Now, take a look at your monthly expenses. Work out a spending plan, and decide on a monthly amount you can pay to debts.
The next step is to work out a plan by which you may pay some of your debts off entirely, but in which you pay each of them at least *some,* and then commit to paying each outstanding debt a certain amount each month.
Once you have this on paper, start calling each creditor to work out a plan. They will most likely be willing to work with you if you offer a lump sum up front and then a monthly amount after that. You might want to start by offering them a smaller amount than you are actually willing to pay, in case they want to talk you up some.
Finally, stick around this board for support as you work your way out of debt.
I am not a big proponent of paying debts down all the way at once, anyway, so don't fret if you can't pay it all with the lump sum you have. It's good to have an opportunity to develop good money habits by paying your debts back the slow, hard way. A lump sum is great for getting you caught up and back on track, but it's also good to have to work pretty hard at the remainder for a while. Believe me, I speak from experience--I wouldn't have learned nearly as much as I have if I had been able to pay all my debts back in one fell blow. I'm still working on my debts and learning. :)
This is the greatest board, and you will get so much help here as you continue your journey. Keep coming. And, hey, congratulations on your windfall. :)
Blessings,
Heather
I don't have anything to add. Heather is very resourceful. She has pretty much sumed it all. I just want to welcome you to the board.
MYM
I see your point, debtsucks, but I still think it's worth at least trying to contest it with the credit bureaus, who don't care whether it's valid or not, only whether there is adequate documentation.
For one thing, apparently the hospital never even sent her a bill. If they had wanted her to pay the bill, they should have collected her address while she was there.
Secondly, if it were me, and I were in the emergency room and told the nurse I was insured but didn't have my card with me, and she said "No problem," I would assume that meant that she could look up my insurance or something and that everything was fine--not knowing the ins and outs of insurance and hospital billing, I would just assume it was all hooked up to a network and they could look it up by my name. Unless she told me I needed to send the information later, it wouldn't occur to me I needed to.
Sure, it was a mistake on both ends, but she shouldn't be held responsible for their mistakes. If they had sent her a bill and she had ignored it, then it would be her problem. If they had said, "Okay, but you'll need to call us with that information" and she didn't, then it would be her problem. But they didn't. They just said, "No problem" and then sent it to collections (or wherever). She never even knew there *was* a problem.
At least, that's my understanding from her post.
Perhaps it's fruitless to try to argue the point with the insurance and hospital, or even to take it to small claims, but I think there's as strong chance it will get taken off her record if she contests it with the credit bureaus, and I think it's worth checking into.
On the other hand, and your post reminded me of this, she should also check into the statute of limitations on these things, to make sure the hospital can't sue her for payment, as that could happen even if it's not on her record, unless the statute of limitations has run out. In any event, she should be keeping careful documentation of everything, in case *they* take *her* to court (which hopefully won't happen, but it's good to be prepared).
Heather