Countless Americans struggle to pay for their medical expenses every year. It only takes one major medical crisis to set a person back thousands of dollars. If that person does not have adequate savings for emergency expenses, it can be very easy for that medical bill to turn up past-due and fall into collections. This situation is an all-too common occurrence for many Americans.
An estimated 43 million American consumers reportedly carry some amount of unpaid medical debt. It is also reported that half of all debt listed on American consumer credit reports is from medical expenses, according to a 2014 Consumer Financial Protection Bureau (CFPB) study.
Many of these bills come from a medical emergency, resulting in that person needing to receive treatment from a specialist who is out of their insurance network. Months later, that medical bill showing that the provider was not covered by his or her insurance, can be an unwelcome surprise.
This fact is what makes medical debt so unique. Rarely is medical debt a voluntary expense. It is usually incurred in a life-or-death matter when the person has no choice but to receive treatment in order to survive. The problem is these balances can add up quickly and can be very difficult to pay down.
Many consumers are not aware of the fact that hospitals and medical providers are oftentimes more than willing to work out a payment plan with the consumer to handle the debt. If the individual ignores the bill and leaves it unpaid, however, hospitals will send the matter to collections.
Medical providers will try to collect on this debt for as long as necessary, which can make it very hard to escape. Even if the debt is past the statute of limitations, this fact does not always prevent debt collectors from trying to get payment on the amount owed. For medical debt, the statute of limitations in Florida is five years, but collectors have been known to attempt payment even after that point.
Hospitals tend to use several different collection methods when trying to get payment on a bill. They usually start with a nicer approach, assuming the person somehow misplaced the bill. If the individual fails to respond to these initial attempts, they have in-house collections departments that often will report the amount owed to a credit bureau after a certain point. They will also resort to typical collections efforts, including phone calls and written communication to get payment on the debt. The problem is each separate doctor’s bill is considered a separate debt. If all these bills go unpaid, that could result in a phone call for every bill. While the Fair Debt Collections Practices Act (FDCPA) prevents harassment from debt collectors, it does not account for the fact that technically collectors can contact the accountholder on every debt owed, which could make for a lot of phone calls.
Many times, a hospital may sell the debt to a third-party debt collector who will then pursue the debt. They may choose that as a matter of convenience or simply to get the debt off their books. If this happens, however, it is important that the consumer ask for verification of the debt. Mistakes can be made when bills change hands. It is important that the consumer reviews the bill to ensure that all information, including the amount owed, is accurate.
If all else fails, the collectors may choose to sue the individual owing the debt. If they are successful in receiving a judgment on the debt, this could result in a garnishment on the person’s wages or a lien on his or her property in order to satisfy the amount owed. If it gets to the point where the consumer is not able to handle the payments on the debt and is at the point of considering bankruptcy, it is important that this happens prior to a wage garnishment being ordered or a lawsuit being filed against the consumer.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.