Are you having trouble paying your hospital bill? Has your hospital filed a lawsuit against you? If yes, then you must be worried about your medical debt. But every problem has a solution, and this is no exception. However, to win a medical debt suit, you must be aware of your rights; otherwise you’ll never be able to defend yourself against aggressive collection practices.
These guidelines and your rights are described in a simple way, so that you can understand them easily and take the right action. If you’re still unable to deal with aggressive medical debt collection practices, then you can call call 800-530-OVLG.
When you have unpaid bills, a hospital’s accounts department may contact you for payments. If you don't cooperate with them, there are a few measures they can take to collect payments.
Usually, hospitals sell unsettled accounts to a third-party collections agency when the internal collections department fails to receive payments from you. The third-party collections agency will contact you and demand payment. If you do not pay then they can file a lawsuit against you.
The hospital itself can also file a lawsuit against you. However, if your unpaid bill amount is less than a few thousand dollars, the hospital may opt not to sue simply to avoid the legal expenses associated with a suit. Attorney fees are likely to be between $200 and $400 per hour. Even if the court issues a judgment against you, the hospital is unlikely to profit off of the case because of the high cost of litigation. Even in a short case that takes only a few weeks to resolve, the attorney is more likely to show a profit on the case than the hospital.
First of all, the hospital should file a summons to start a court case. The hospital should send the copies of the summons to you in person or by mail.
Once you receive the summons, you should take the following steps:
You have many options when it comes to responding to the summons. You should be careful not to make claims that are not true, as they may result in you losing the case.
Whatever approach you take, you will likely need to appear in court for a hearing at a date or time listed in the summons.
In case you don’t file a response, then the hospital will win the case by default. That means the court will enter a default judgement against you. At that point your only option is to file an order to show cause. That means you have to face the judge and explain the whole matter and prove that:
See also: Medical debt declines: Days of financial distress are now numbered
When collection agencies aren't able to collect payment from you, they can take legal action against you. We have discussed that before. The big question now is can you go to jail over unpaid hospital bills?
The honest answer is 'No.'
You won't go to jail for not paying hospital bills. Medical bills are civil debts. As per the law, you can't be sent to jail for not paying medical bills.
Are there exceptions to that rule?
Unfortunately, the most accurate answer is “sort of.” In certain states like Illinois, Ohio, Missouri, and Pennsylvania, debt collectors are using a new strategy to put debtors in jail when they don’t pay hospital bills.
It works like this. When a collections agency wins a lawsuit against you, the court will order a judgment against you. The collections agency can then garnish your wages or levy your bank account. If they can’t find any income or assets to be garnished, then they can request the court to ask you to appear for a debtor's examination.
If you don't appear at the debtor’s examination, or otherwise give a proper reply, the court can issue a warrant for your arrest. If you’re arrested, you'll be put in jail, where you will most likely stay until you pay a bond. Unfortunately, the amount of the bond is usually the same as the amount of the judgment.
I should be clear about what happens in this case: you are not being jailed for unpaid bills. You’re going to jail for ignoring a court order. Doing that is always a bad idea that puts your freedom at risk. Think very hard before ignoring court orders.
When your hospital bills are in collection, they appear on your credit report and hurt your FICO score. This reduces your chances of qualifying for credit cards and other loans. If you’re planning to apply for a credit card or a loan, then you should take prompt steps to safeguard your credit score.
Many hospitals count on the lack of consumer awareness. They count on the fact that consumers don’t know what they are billed for and they take advantage of that situation. Fortunately, attorneys know the laws. So neither the hospital nor the collections agency will easily fool them. An experienced attorney can negotiate discounts on the items that have been overcharged, and it’s very common to find items that have been overcharged. Our attorneys in particular know how to negotiate medical bills in collections very well.
Yes, hospitals can turn you away for unpaid medical bills. Often patients are not aware of the fact that they have unpaid bills. They assume that their insurance company has taken care of their obligations and paid the bills. But the reality is frequently different.
The next time these patients go to the hospital, they may be turned away because of their past due medical bills. That’s when they discover they have unpaid bills in collections, and will be denied medical treatment until their debts are paid.
According to a study by FINRA Investor Education Foundation, 1 in 5 people with medical insurance has unpaid hospital bills. Most of them receive collection calls. Sometimes, consumers answer those calls and resolve the debt. At other times, consumers don’t even answer those collection calls, assuming they’re spam, scammers or wrong numbers.
Medical debts are unexpected and unplanned. These are actually emergency debts. So many people argue that consumers shouldn't be turned away by the hospitals. After all, where would people go if they have an accident?
The law states that people can’t be turned away for emergency care fees. But the law doesn't specify that people can’t be turned away for unpaid hospital bills. So you can’t force a hospital on this issue.
(The following applies only in the state of New York.)
In New York, medical bill payment plan laws say:
Sometimes, collection agencies harass debtors unethically. Know your rights to avoid harassment. The Fair Debt Collection Practices Act, a federal law, prohibits collection agencies and attorneys from most types of aggressive collection practices.
If the collection agency engages in aggressive collection practices, they may be violating the law. In that case, ask them to stop the harassment by sending them a cease-and-desist letter. If the agency still harasses you, then you can file a complaint with the New York City Department of Consumer Affairs and the New York State Attorney General’s Office of Consumer Frauds and Protection.
Here are some of the things hospital collection agencies can't do:
Read more: What are the collection rules for medical debts?
Wage garnishment is an automatic withdrawal of your wages to pay a portion of your medical debt with each paycheck. If the hospital wins a judgment against you, and you earn more than the minimum wage, the hospital can garnish your wages. But here’s the good news:
Ans: When you have outstanding medical bills for a long time, then hospitals may assign the debt to a collection agency. In most states, hospitals can't charge interest on medical bills. But they can send your bills to a medical debt collector, who can file a lawsuit when he is unable to get anything from you.
Ans: When you can't pay hospital bills for several months, in spite of repeated reminders, your bills are sent to collections agencies. If hospitals have an internal collections department, then unpaid medical bills are first assigned to them. When they fail to recover debts, your bills are assigned to a third-party collection agency.
Ans: When medical bills go to collections, the debt collector reports them on your credit report, hurting your FICO score. At that point, it won’t matter if you're making minimum monthly payments; your credit report will list that the debt is in collections, and your FICO score will reflect that.
Even if you pay off bills with a medical debt settlement program, the updated account status will remain on your credit report for 7 years and 180 days from the first date of delinquency.
Ans:When a medical debt collector files a lawsuit, you can take the following steps to deal with it:
Ans: That’s a tough situation. Fortunately, you have a few options.
Ans: That depends on how much you have been overcharged. If you have been overcharged by only a few hundred dollars, then the court fees make filing an expensive and impractical option. The best option in that case is to contact the hospital and ask them to correct the medical bill. If they refuse, you can consult a medical bill lawyer. Of course, if the overcharge is significantly higher than that, consulting a lawyer is a good idea anyway.
Ans: It is illegal for collection agencies to charge interest on medical bills. You never agreed to pay interest in the original contract for medical care, and medical bill collectors can’t unilaterally start charging you interest.
Ans: Look at your credit report. If you find hospital bills on it, your medical bills are in collections. Debt collection agencies report delinquent debts to credit bureaus. So you’re most likely to get the contact details of the collection agency from your credit report. Of course, most collection agencies will contact you before you think to check.
Ans: Fortunately, the Consumer Financial Protection Bureau has instructed FICO to consider hospital bills differently from other types of unsecured debts. Usually, medical debt doesn’t hurt your credit score. But when you refuse to pay medical bills, they go into collections, and at that point the debts get reported to credit bureaus, which definitely hurts you.
You're more likely to find hospital bills on credit reports when they are delinquent for more than 180 days and are assigned to debt collection agencies. When you pay off your medical bills, they affect your score less.
Past due medical bills hurt your FICO score by 50 to 100 points. So, if you have past due bills in collection, try to pay them off as soon as possible.
Ans: Debt consolidation programs can help you pay medical bills through small monthly payments. When you enroll in these programs, debt counselors help to simplify your payments and pay medical bills over time. They also help you get rid of other charges on your bills. Know more about debt consolidation.
Ans: An experienced medical bill lawyer should know all the rules and regulations governing medical billing and medical bill collections. If the hospital has overcharged you or given you an erroneous bill, a lawyer can help you dispute the charges. The US healthcare system is complex and difficult to navigate. A good medical bill lawyer can help you to fight for your rights.
Apart from tackling a dispute, a lawyer can help you pay off medical bills in collections. They can negotiate with collections agencies and help you to settle medical debt.
Ans: Can hospitals garnish wages? The short and simple answer is 'yes'.
Hospitals have to obtain a judgment in order to garnish your wages. Usually, hospitals don't keep their own in-house collections agents, so in most cases, they assign the task to outside collections agencies.
A collections agency has to file a lawsuit against you in the county where the debt originated. The court will issue them a case number and a hearing date. At that point, they are required to send you a notice within 3 to 4 weeks of filing the lawsuit. If the collection agency wins the case, then the court will issue a judgment against you.
Once a judgment is issued, debt collectors have to wait fifteen days before filing the garnishment, with the declared amount and your employer's contact details. The local sheriff’s office serves the garnishment order to your employer.
Remember, nobody is allowed to break the law. That includes hospitals and collections agencies. If you know your rights, you'll be better able to stand up for yourself. Stay updated and keep all your financial and medical records. And remember, before you take any major step in a fight against debt collectors, you should contact a lawyer.