Reader Question: Medical Bill In Collections With No Warning

A reader sent in a question about a medical bill that went to collections without her knowledge:

I received a notice that I was in collections for a medical bill. I never even knew this bill had gone unpaid! I had paid all the bills I received for this procedure. I called the hospital and they told me there was nothing I could do about it. This is going to ruin my credit scores. What can I do?

This is a very common practice, unfortunately. A 2003 Federal Reserve study found that over half of all collection accounts on credit reports are due to medical collections. Unfortunately, there is no requirement under federal law that you be notified before the bill is placed with a collection agency, nor any requirement that you be given the opportunity for you to pay it before it affects your credit. If it’s inaccurate, you can dispute it after the fact (with both the credit reporting agencies and the collection agency), but by then the damage may have already been done.

I have two suggestions:

1. Ask the collection agency not to report it if you pay right away (assuming you can). If so, get that agreement in writing before you pay. This happened to me once over a bill I was disputing because I thought the insurance company should have covered it. When the collection agency called me, I agreed to pay it that day if they agreed not to report it. They did, I did, and it never hit my credit. There is no guarantee this will work for you but it’s worth a try.

[Consumer Resource: Statute of Limitations On Debt Collection by State]

2. Complain to your elected officials in Washington (senate.gov and house.gov). Ask them to support the Medical Debt Relief Act, which would remove medical collections from credit 30 days after they are paid. Go ahead and file a complaint with the Consumer Financial Protection Bureau as well.

Medical Bill in Collections (con’t.) »