debt collection


Alabama Legislature Proposes to Help Credit Card Companies Sue their Customers – Alabama Debtor’s Rights Attorney Judson E. Crump   Recently updated !

The Credit Industry Lobby has Succeeded in Convincing the Alabama Legislature to Make it Easier to Sue Customers. Once again, a big business lobby has convinced some of the fools in Montgomery to propose a bill that would help the huge-money finance industry at the expense of ordinary working people. […]


What is the Statute of Limitations on a Credit Card Lawsuit in Alabama? — Alabama Consumer Credit Lawyer Judson E. Crump 1

If you’ve defaulted on a credit card, how long can the bank wait to sue you? Believe it or not, this is a surprisingly complex question.  In most lawsuits, the statute of limitations is simple.  Car wreck cases have to be filed within two years.  Ala. Code Sec. 6-2-38(l).  So […]


Alabama’s Exemption Statute – Why so stingy? – Alabama Debtor’s Lawyer Judson E Crump 2

DID YOU KNOW? Alabama (No Longer) has the weakest exemption statute in the country. This is a correction to a previous article I wrote, which has been made necessary by a positive change in Alabama law. In January of 2015, I wrote the following article about Alabama’s exemption statute: “What’s […]


“If you have a bill in collections that is dragging down your credit score, chances are high that it’s medical.”

So says a recent Washington Post article about the US Consumer Financial Protection Bureau’s recent study of medical bill collections.

The study found that over half of the delinquent accounts that are reported against US citizens’ credit reports were medical bills.  And there were a LOT of people – about 15 million – whose only delinquent account on their credit report was a medical bill.

Medical bills are often hard to prove.  Very often, there is no written contract.  The provider may have not submitted the bill to insurance properly or timely, and therefore lost the right to collect from insurance and instead just decides to try to collect directly from the patient.

And a short visit to a single hospital can spawn a dozen separate bills – one from the hospital, one from each lab that handled your blood, one from each doctor who either saw you or your X-rays, one from a pharmacy, and God knows what else.  You may have never encountered these people and have no idea who they are, but they’re still asking you for money.

And if you ask for verification of the amount allegedly owed, you may not ever get any information.  The whole process is very mechanical and there’s often little to no human involvement in the collection process.

So what do you do if you have strange or inflated medical bills showing up in your credit report?

First, you should contact the medical provider and ask for an itemization of the bill.  How much are they charging you and why?  Will they give you a discount for what your insurer won’t cover?

Second, you should send a written dispute to the credit reporting agencies.  Tell them how much you legitimately owe and ask them to report nothing more than that.

Third, NEVER pay money just to get something off your credit report. A LOT of collection agencies report bogus amounts just to coerce you into paying.  If you owe a hospital $60, a collector may report that you owe $100, just because they’re betting that you’ll pay them the full amount to clean up your credit records.  Don’t fall for this.

Fourth, don’t be afraid to challenge them if they’re asking you for an unreasonable amount.  If they were to take you to court, they’d have to prove that the charges were reasonable and medically necessary. If they inflate the ‘price’ of services to compensate for discounts they provide to insurers, then they can’t just force you to pay whatever they want to put on some bill.


Great article by the New York Times.  Even though consumer lawyers like me have been saying the same thing for years, putting it into the NYT will make more people understand what they need to know about the modern debt collection industry.

 

http://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html?hp&action=click&pgtype=Homepage&version=HpSum&module=second-column-region&region=top-news&WT.nav=top-news&_r=1