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What should we do about a medical debt collection threat?

What should we do about a medical debt collection threat?

Full question:

A collection agency for a four year old medical debt is now threatening to put a lien on the house and report to credit agencies. The contract's first service was 3/30/2005 The last payment by us was 10/04/2006. The reason for non-payment is disagreement to the amounts owed and amounts already paid by insurance.The debt is close to $15,000 with late fees. What should we do at this stage?

Category: Debts and Credit
Date: 04/07/2025
State: Texas

Answer:

I recommend settling the debt before the collection agency obtains a court judgment. If a judgment is entered, the creditor may be less willing to negotiate and could place a lien on your property or garnish your wages. When negotiating a settlement, ensure you receive a full release of claims to prevent the creditor from pursuing any remaining balance later.

Consider contacting your insurance provider, as they typically require medical providers not to bill for amounts exceeding what the insurer agrees to pay.

Under the Fair Debt Collection Practices Act, if you dispute the debt within thirty days of the initial contact, the collector must cease collection efforts until they verify the debt. You can send a letter stating you do not owe the money, which will halt their contact temporarily. If the collector fails to follow these regulations, you can report them to the Federal Trade Commission or file a lawsuit for damages within one year of the violation.

If there is inaccurate information on your credit report, contact both the credit reporting agency and the source of the information. Under the Fair Credit Reporting Act, they must investigate your claim. If they find inaccuracies, they must correct them in your file.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What to do if your medical debt is going to collections?

If your medical debt is going to collections, first verify the debt by requesting a written validation from the collector. You can dispute the debt if you believe it's inaccurate. Under the Fair Debt Collection Practices Act, you have 30 days to dispute the debt after the collector contacts you. If you dispute it, the collector must stop collection efforts until they verify the debt. Consider negotiating a settlement to avoid further action, and keep records of all communications.

What to do if a medical bill goes to collections?

If a medical bill goes to collections, review the bill and your insurance statements to ensure accuracy. You can dispute the bill if you find discrepancies. Send a written dispute to the collection agency within 30 days of their initial contact. This will pause collection efforts until they verify the debt. You may also want to negotiate a settlement to resolve the issue before it escalates to a court judgment.

What to do if a debt collector threatens you?

If a debt collector threatens you, remain calm and do not engage in confrontational behavior. Request written documentation of the debt and dispute it if you believe it is incorrect. Under the Fair Debt Collection Practices Act, collectors cannot use threats or harassment. If they violate these rules, you can report them to the Federal Trade Commission or seek legal advice to explore your options.