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Dealing with a debt collections agency
MrDelish
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Registered User regular
I have a friend who had some surgery when he didn't have medical insurance. And no job. Basically, he started getting bills and was/has been unable to pay them as he is studying and got a meager part-time job a few months after the surgery. The loan was sent to a bill collections agency and he's been getting repeatedly called by them (a few times a week), and got a message today from them that basically said this:
"I'm giving you this final call regarding this important business matter. I need you to call me back by 5 PM before proceeding further."
Now, he's not trying to avoid the bill but he definitely does not have the means to pay it. To me, this call sounds too vague to be anything but a "call us so you can pay us." Anyone run into this before or can give advice as to what he can do in this situation?
"I'm giving you this final call regarding this important business matter. I need you to call me back by 5 PM before proceeding further."
Now, he's not trying to avoid the bill but he definitely does not have the means to pay it. To me, this call sounds too vague to be anything but a "call us so you can pay us." Anyone run into this before or can give advice as to what he can do in this situation?
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Then have your friend visit the Federal Trade Commision's website for more details as to what he should do: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm
Never call them back. Usually if they can't get a hold of the debtee, they start calling known relatives, friends, and neighbors- who can all insist that they receive no further phone calls.
-Current W.I.P.
Medical billers know there is a high risk of default. They'll work with him.
Edit: The two responses above me are an awesome recipe for terrible credit.
At this point, it's a collection agency dealing with this. The hospital billing department has already given up and has sold the debt off.
I am headed to court tomorrow to file a countersuit against a collection agency for 18 FDCA violations, and I am asking for $18,000 for a $1300 bill that they have been harrassing me about illegally. I honestly doubt that I will get the full $18,000 (it's at a Judge's discretion) but man, even $1000 would be almost enough to pay them and get it off my credit. The trick it to learn the FDCA - most violations, violate more than one provision, and each one is considered a violation in it's own right. From what I have read, the average FDCA payment is $3500 when you follow through with it.
Just sue.
So ridiculous.
Any implied sense of urgency from this statement is most likely deception.
i used to work as a collector and I would use this line almost word for word.
It's not about paying for services rendered, or not paying for them. It's about my rights as a consumer. If I had the money, I would pay them, I even tried to set up payment arrangements. They thought that they would get more $$$ out of me if they harassed me, and when I asked for them to validate the debt they suddenly didn't want to talk to me anymore....until they sued me, illegally. I think not.
If I asked you to give me $1000, would you maybe ask what you owed it for? If not, you really need to contact me about a business matter before I pursue further action....
Off your credit? If you paid them off in full this very instant, your credit will still show that you were delinquent in that payment. Further, if you won any sort of court battle over this, you'd still have the credit hit.
You didn't pay your debt. It was passed on to a debt collector. No matter how unprofessional this collector was, you still owed that money and it is still going to sit on your credit file as a big, fat, black mark.
True, you should not have to deal with silly geese harassing you at every moment for this money, but you still owe someone this money.
This isn't always the case (at least here in the UK).
If the original creditor has sold the debt on to a DCA, then they may have essentially written it off. If the DCA has NOT adhered to their legal requirements when purchasing the rights to the debt, then they don't actually have any legal rights to that money.
Since you have no contract or agreement with the DCA, you certainly don't owe them anything, and if the original creditor has written off the debt, then you no longer owe money. The debt will become statute barred in 6 years and drop off your credit score.
I don't know enough about the friend of the OP's situation to suggest that this is a possibility here, but this is what has happened to me - I had a debt which was written off, then incorrectly sold, and now it no longer exists because nobody can legally claim it.
My advice, which echoes what others have said:
DO NOT speak to DCA's on the phone -- ask for everything to be in writing and tell them that further calls will be viewed as harrassment. Start making a log of any further calls.
Read up on your rights! DCAs often operate illegally and rely upon ignorance and fear to get their money. If the US is similar to the UK, then a debt must be legally proven before it can be enforced.
Above all, tell your friend, NOT to panic or worry about this, as long as your rights are understood and you follow the correct proceedures for things, dealing with debt is a perfectly manageable thing.
Well, if you're not worried about a credit hit like that affecting you for six years, you might as well just claim bankruptcy. What is that, seven years?
I don't like the idea of telling this guy to ignore the problem and maybe some loophole will pop up to get him out of his fix. He wracked up bills, he's going to have to pay them. The OP's friend doesn't seem to be looking for a way to trick his way out of debt, he just wants the calls to stop. You know how you make the calls stop? You work with the people you know you owe money to and you set up a payment plan.
I had a run-in with a collection agency (due to a fraudulent account made under my name) that quickly escalated to a lawsuit against me because I was "ignoring the calls." In actual fact, they had been calling the wrong number for months and by the time they actually found me, the wheels were already in motion to sue me for this debt. Ignoring the problem does not make it go away.
Never, ever confuse a monetary or debt problem with a moral issue. (this is actually a tactic collectors will use against you - "A real man pays his debts").
Looking for "loopholes" as you call it is not "ignoring the problem". It would actually probably take more work figuring out all the laws and what your rights are, and then defending yourself, than just paying it off (assuming the guy even has the money to pay the debt - im guessing no).
Bankruptcy may or may not even apply to medical debt (as virtually no one in Canada has medical debt i don't know). I am not 100% sure but I think it stays on your record a lot longer than 7 years. I might be wrong.
One option might be to get a trustee and figure out a consumer proposal - you work with them to figure out realistic payment options. They may reduce the debt, lower interest or penalties, or remove existing penalties.
One thing is definitely true though - ignoring it or waiting around will only make it worse. If your friend worked with the original company he owed money, he could probably have worked something out with them.
Medical debt is in fact the number one reason people file for bankruptcy in the United States.
The statute of limitations only applies IF and only IF they don't file a lawsuit within those 4-6 years (depending on the state, country, etc).
If they do file a lawsuit, that debt could be hanging around for a lot longer than that.
This right here.
I had a similar problem (although I actually had health insurance at the time, but the bill was still far too large for me to pay).
Basically I talked to them and they literally asked me how much I would be able to pay.
Your friend should be able to scrounge up $50 on a month or something. They will be okay with that. Honestly, even though debt collectors are pretty relentless with tracking you down, generally all they really want is to get the case resolved in whatever way possible.
first off, the FDCPA only applies to non-primary creditors - liscenesed bill collectors and lawyers acting as bill collectors, essentially. So the OP needs to find out if this debt has been moved to a collection agency or if the caller is an employee of the creditor, because different sets of rights apply.
Secondly, while most above-board collections agencies will honor requests to move communication to writing, they technically only HAVE to do so if the request is in a letter.
Initial written validation only needs to go to the address you provided your creditor - as long as they can show they made a good faith effort to do that, they can typically protect themselves from a claim they did not validate. Most collections agencies in the US do this via a certificate of mailing reconciled to the their client records.
They may begin contacting you by phone as soon as they have begun to process that validation - once it is in the mail.
(this initial letter is the one that informs you of the debt, gives you 30 days to pay it or contact the office with a dispute/request of validation of debt)
When you request 'validation' of the debt, the agency does not need to provide "proof you owe the bill" - they need to provide the original creditors' identity and some substantiation to proove they were legitimately assigned the bill, which is very different. They have to prove they have a case, not that that case is iron clad.
A lawsuit does not, itself, reset the statue of limitations - the judgement arising from the successful lawsuit is governed by a second statute, which may differ in length and terms. for the record, the shortest are DC and Texas iirc. Debt statutes of limitation are calculated from the last payment made, not the origin of the debt.
as far as the "final call" wording - a collector is not allowed to threaten you with any legal action he is not prepared or preparing to actually take. If you can somehow demonstrate the agency has no standing or intent to actual sue you, you have grounds there. If they can show they were working your account through a pipeline for lawsuit, they can imply they will sue. Since most agencies use scripted escalation in their letters and calls for just such a reason, that's a hard one to hang them on.
What's gold as far as FDCPA violations are abusive language, off hours or highly reptitive calling, calling after a written request to cease calling, and threats of things collections agencies cannot do in the US.
The easiest thing to do is call them back, and politely work with the person -pitch a whole solution and tell them what you need to pay the bill is an itemized statement, copies of the original bills, and copies of the patient agreements you signed. Ask them to enclose a proposal for a 36 or 48 month payoff.
edit: Be aware their payment plan will ususually invovle a renewal of the debt as a creditor of the DCA directly. IE you sign repayment terms for 3600 dollars and now your obligation is TO THE DCA in liu of your old obligation to the original creditor. They have made themselves into your primary creditor and their rights change. Watch out for that and avoid it if you can.
When you make payments to a collections agency, always use money orders and always send a letter requesting a recipet and updated payoff. Never use a debit card or check, as they are goldmines of second hand personal information and give them access to your financial institution to potentially garnishee your wages post-lawsuit.
If you have access to some cash, offering a settlement between 35 and 65% of the original debt - not the trumped up "plus fees" balance - in writing will often get you a workable counter-offer
I host a podcast about movies.
The original creditor (this is us law though) legally assigns the DCA to collect the debt. You can't say "I have no contract with the DCA and the primary creditor has written it off so you guys are SOL"
Now, if you have behind the scenes access to the companies and can demonstrate that the primary took a p and l writeoff on the debt, then collected money for it, you might be able to get them in some hot water
Also, in the US, the statues on credit reporting are federal and vary from 7 - 10 years depending on type of debt. A debt can be legally reportable on your CR when it isn't legally collectable in the state it was incurred in.
as for bankruptcy vs ignoring one collection - no, no, no. one collection line on your credit report, esp a medical one, is not NEARLY the black mark that a BK is.
I host a podcast about movies.