I have a hospital bill that went to collections

One of my favorite features of MoneyManagement.org is the ability for consumers to submit questions and receive a personal answer via email. Our Ask the Experts column has been running for many years and in that time we have answered hundreds of thousands of questions related to credit, debt, and money management. We recently received this question about medical debt and collections. Since it is a frequently asked question, I thought I'd share the answer here.

Question: I have a hospital bill that went to collections. I had been paying on the bill for several years, and during a busy period in my life, forgot to mail in my payment. I was 1 1/2 months late. Rather than send me a late notice or any sort of warning, the hospital sent the bill straight to collections. When I called the hospital the highest official in the business office basically told me that they were tired of carrying the debt, and because I was late on a payment once before, they were unwilling to help me. Now I'm dealing with the collection agency, and feeling very frustrated by the whole thing. I have no other financial problems, and never have, so I don't know what my rights are in this situation.

I've written several letters (sent certified) explaining that it is impossible for me to pay the amount in full, which they asking me repeatedly to do. I told them how much I could afford to pay per month, and sent them a check in that amount. They cashed it, so I assumed they agreed to the terms, but when I didn't hear from them again, I sent another check, which they returned, saying, again, that they wanted payment in full.

What should I do, and what are my rights? If you could help me at all with these questions, I would be so appreciative.

Answer:  I am sorry to read of your situation. I know that facing debt collection after suffering from an illness or accident only adds stress to an already stressful situation. The unfortunate fact is that your situation is not uncommon. 

You do have rights under the Fair Debt Collection Practices Act; however, from what you have told me, it is not clear that the creditor has violated the Act.  While many medical facilities do accept payments, they are not required to do so. The total cost of medical services are generally due in full at the time the services are rendered.  As a convenience, your medical provider may offer to bill your insurance for payment, but in the eyes of the medical provider, you are ultimately responsible for the bills' payment-- not your insurance company.

So if you do not dispute the amount owed, you will need to find a way to pay the debt.  (Note: if you do not agree with the amount owed, read the Fair Debt Collection Practices Act for how to dispute the charges.)  I recommend that you contact the medical provider again (rather than the collection agency) to see if there is any assistance available.  Many hospitals and medical facilities have access to assistance programs, and you usually have to ask to find out if you are eligible. You can also try to renegotiate a payment plan that will work for your family. If you are successful, get the details in writing to prevent any future problems.  I know you have gone down this path before, but it is never too late to negotiate.

If you are unable to negotiate an acceptable repayment plan, you might try to find additional resources to tackle this debt quickly.  You could consider selling assets, taking on temporary work, or securing another type of loan.  While you may consider paying off your medical debt with a credit card, that’s usually not your best option. Not only will you just be switching the debt from one creditor to another, you’ll also no longer be eligible for financial assistance or payment options from your medical billing company.

You might also consider contacting a medical or patient advocate.  Medical advocates help consumers cope with and manage medical debt.  Finally, if this debt is truly a financial hardship for you, you could meet with an attorney to discuss your rights including bankruptcy.

You might also enjoy reading other commonly asked questions and answers on the following topics:

How to stop collection calls at work

Ask the Experts about love and money

Why friends and money don't always mix

Note: This is for informational purposes only and is not intended to be legal advice. For help with legal matters, it is always best to consult with an attorney.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.