Posts tagged with: medical debt

Medical Debt Collector Dilemma

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One of the debts on our debt spreadsheet is from an outstanding medical bill we owe. Before this month’s payment, we owed $5611.00. We’ve been making payments for years but have only been paying the minimum $25/month (with 0% interest). At some point we always knew we’d obviously pay more. But it was a lower priority when we have other student loan debts racking up over 6.5% interest!

Well, just this week we received a bill from the debt collection agency stating:

“If you will pay $3647.15 of your balance by phone using a debit card, credit card, or check by phone, our client has agreed to adjust the remaining $1963.85 and you will have a zero balance.”

Well, I thought it was a good deal. I immediately showed hubs.

“Hey, should we just pay this debt off and be done with it?!”

His thought is: no. We should continue making our minimum $25 payment as normal. He thinks that eventually they’ll come down even more. While we focus on my student loans we’re in no hurry with them. It can sit and wait (as we continue making our $25/month payments). They’ll be there when we’re ready to negotiate.

As a little backstory, at the time when we first incurred the medical debt (back in December 2013) I called and tried to negotiate settlements if I could pay the debt in full. We owed several different medical entities (I wrote about how hubs had a weird health crisis in one of my very first posts on this blog). When I called around, only one (0ut of maybe 4 or 5) would even negotiate. I’ve since heard Dave Ramsey talk about this on his radio shows: few medical entities (or collectors for medical entities) will negotiate and settle debts. I guess they’re less likely to do it than a major credit card company, for example.

So the fact that this company is offering a settlement now, I thought, was HUGE!

But then, I got a call today on my cell. It’s the debt collection company (who has never once tried to contact me before). They asked how we planned to pay our bill. I told them that we’ve been paying our bill and planned to continue the way we have been. They said that, no, we were not actually on a payment plan. That we needed to pay the bill in full. And then they started trying to confirm information (employer, address, etc.). I confirmed our address but, when they asked about employers I said I was uncomfortable talking about that and they got all huffy and ended up hanging up on me. No mention of the settlement offer that they had just mailed.

Soooo…what the heck, guys???

I don’t know what to do! I’ve heard many times on Ramsey’s show about nasty debt collectors calling employers, etc. I’ve literally never had a call from this entity before and have been making faithful payments. Now I don’t know if they’re lying, or trying to scare us into paying, or what?! And I was about to pay in full to receive this settlement, but now I don’t know if that’s a terrible idea – like if they’re trying to take advantage of us. For instance, if we pay with a debit card and then they try to withdraw more than we agreed to, etc. Or what if I’m being overly dramatic? I just have absolutely NO experience with debt collectors. And then we get this letter, and now this rude call, and now I’m worried about my boss getting a call… What the heck!?

Thoughts? Advice? Words of wisdom?

*****UPDATE: I’ve written some relevant updates in the comments section. I’ve now received a new/updated settlement offer (see comments). Looks like I may be getting rid of this debt sooner rather than later, after all! ******


Poof – Be Gone!

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Wow, it has been a loooooong time since I’ve paid off a balance in full! When I first started blogging I was knocking debts out left and right (and, to be fair, some of them were pretty small debts). But for the past several months I’ve just been chip-chip-chipping away at some of the bigger debts.

I’m so glad that I can finally report that I’ve knocked another couple of debts off my debt list! (See last debt update here)

First up on the chopping block, I’ve finally paid off the second of our 3 monthly medical bills. We started off 2014 with 3 separate monthly medical bills: $75/month, $50/month, and $25/month. First I knocked out the $75/month bill (this actually happened this past November 2014). This month I’ve officially paid the last of the bill for the $50/month payment! Wahooo!!!! This still leaves us the $25/month bill (which also happens to be the largest balance = $6136), but its interest free so I have no intention of paying anything extra to it until other high-interest debts are gone. Regardless, I’m excited to be rid of the $50/month payment, which represented our bill for a specialist (neurologist) from when husband had a mystery illness at the end of 2013. See ya later, Dr. Neuro man! Or no….hopefully we WON’T see you later! Enjoy the money, hope you’ve had a nice vacation on us! (I’m being cheeky, but we really are grateful for the doctor’s services, of course. Just glad this bill is finally gone after over a year of paying on it!).

Next up on the chopping block, my personal favorite (and hubs’ too)….we’ve finally paid off the last of our remaining license fees!!! We had ignored this debt for a long time, and even when payment plans were arranged, the initial amount due was over $10,000. At the time I was a grad student making $500 every other week, hubs didn’t make much more, and it felt like these fees would NEVER be paid off. Oh man, I could go on and on about all the things I WISH this money had been spent on, how foolish we were, etc. Suffice it to say the lesson has been learned many, many times over. These fines represent mistakes we will never repeat for the rest of our lives.

Screen Shot 2015-04-11 at 2.41.19 PM

This is just one of 2 pages of fees. Love seeing those zeros!

 Oh the euphoria of paying of these debts (but the license fees, in particular)!!!

Now we’re officially down to only 3 categories of debts: the remaining medical, the car loan, and (dun dun DUUUUUN) the monstrous student loan debt.

To this end, I have some news to share with you later today. Be sure to check back this afternoon!

Can I get a “Wahoo!!!!” for these paid off debts? Feels oh so good! What’s your latest debt to pay off? What was your most psychologically-pleasing debt to pay off?


Ashley’s Revised Budget

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You may recall that in one of my first posts I shared my budget and asked for opinions on where to cut back. After examining patterns of our spending and listening to reader comments, I’ve made some revisions I wanted to share here:

(Note: I’m new to TablePress so if it cuts off some rows, click to change to showing 25 entries)

BudgetOldNew
Rent10551055
Electricity100100
Water bill7575
Gas bill7540
Sprint phones150150
Cable/Internet8585
Car Insurance13090
Health Insurance: BCBS350350
Waste Management (trash)3535
Debt11001550
Misc.350250
Groceries400400
Baby Purchases600600
Gasoline100100
Savings200190
Total48055020

Let’s talk about some of the changes.

First, you’ll notice the total budget has actually gone UP by a couple hundred dollars. I guess we’re just going to have to make more money : ) This is accounted for by a $450 monthly increase in the amount I will be paying toward debt. I ran the numbers and, after accounting for the minimums due on other debt, if I’m going to make the 1-year goal for paying off my Credit Cards I must increase the overall amount I’m paying toward debt.

I tried to offset this increase by lowering the amount budgeted toward a couple of different categories:

  • Natural gas (not gasoline) fell from $75 down to $40. Wish I could say I’d done something to somehow save, but I just edited this after looking at the past year and realizing that I was simply budgeting too much to that category. Our bill tends to hover around $30, but can be as high as $55ish. $40 was a good average number.
  • Car insurance fell from $130 down to $90. It was even lower, but several comments made me nervous about our precariously low coverage. I increased our coverage back up a little (to $25,000/$50,00/$50,000). It’s still much lower than our original coverage, which is where the savings come into play, but up a bit from what I discussed in this post.
  • I reduced our “Miscellaneous” budget from $350 down to $250.
  • I reduced our “Savings” from $200 down to $190.

Lets talk about the latter two….

Per the recommendation of readers, I decided to break apart my “miscellaneous” category in the budget. Although in the table I posted there is only one line-item for “miscellaneous,” in my excel file at home I actually have it broken down into a separate table where the item totals fill in the “misc” category (does that make sense?) Here it is:

Miscellaneous (was $350/month; reduced to $250/month)

  • Entertainment = $20/month

This includes things like going to a movie, renting a Netflix, going to a fair or carnival, zoo, children’s museum, etc. My goal is to further reduce this category, but I want to start here and see how it goes – I don’t want to set myself up for failure!

  • Eating Out/Going Out = $75/month

I know this is probably an unpopular decision, as many will think we should not eat out AT ALL during this process (or at least much less than $75/month worth). However, this will probably amount to one family “night out” and one time where I eat out with my friends, so we’re talking about twice a month. This is a HUGE cut-back from previously (based on looking at my past eating-out expenses). I’d love to see this budgeted category fall even more, but this is where I feel comfortable starting.

  • Personal Maintenance = $30/month

From looking at the past year, I noted these types of things that will fall into this category:  yoga, nails, eyebrow wax, hair cut/color. Note shampoo/conditioner/makeup will remain in the “grocery” budget, and I will try to further reduce these costs (e.g., coloring my own hair and painting my own nails instead of going to a salon).

  • Other = $125/month

I know some said to split everything apart, but a lot of these items are irregular purchases that didn’t make sense to have their own column. Again, I selected example items from looking at the last year’s worth of purchases, but note that many of these I may try to DIY or do without this year, so hopefully I can further reduce this category in the future, too: Xmas cards/Xmas photos, parking, dog food, itunes purchases, dollar tree, Bookmans, pet sitter, stamps, gifts, doctor’s copays.

 

Savings (was $200/month, reduced to $190/month)

In redoing my budget I realized that I am going to need to redo my savings as well. YES, I am keeping a savings. BUT, instead of just randomly depositing this money into the bank, I made some sub-categories in my CapOne360 account so this money is for a specific purpose. I also reduced the overall amount of savings per month (albeit only by $10/month…every bit helps!).

  • Semi-Annual Fees = $40/month

I think the main item here is car registration ($350 annual for me, $100 annual for Chris, so there’s still a little buffer, too).

  • Car maintenance = $50/month

Oil change, taking care of any unexpected repairs, and savings toward a new vehicle (Chris’s truck is ancient and has 200,000 miles on it – as discussed here – so I think it’s wise to start a little savings for a just-in-case moment that is inevitably going to happen at some point).

  • Dental & Vision = $50/month

We have no dental coverage, but I usually buy Groupons to go get a teeth cleaning once or twice a year (I actually average about every 9 months). Chris’ teeth are a total mess (and a story for another time), but suffice it to say, we will need this money. Also, I wear glasses/contacts and although my annual eye exam is covered on our insurance, we have no coverage for frames/lenses, so this money can be used for that as well. Regular health care expenses (copay for doctor’s visit) will fall under the “other” category from the “miscellaneous” column.

  • Travel/Christmas = $25/month

Before you jump on me, realize that the total saved is SMALL…only $300/year. We do like to drive back home for Christmas so I’m not talking about “travel” in the sense of an extravagant vacation; I’m talking about extra gas money for a long drive. Also, Chris and I have actually talked about not going back for Christmas this year and staying in Tucson instead (it will be the first time in our lives not to go back for Christmas if this happens). I’ll keep you updated on this one.

  • 3-6 Months Expenses = $25/month

I know this is probably controversial, as many will tell me to eliminate this category and throw the extra $300/year toward debt. This is my “peace of mind” extra money. It’s not going to significantly tip the scale either direction, but it makes me psychologically feel better to save a little every month. Indulge me – I know this is dumb, but it’s rooted deep within me (in my Intro post I even talked about how my family had always instilled in me the importance of saving while I was young!). Some may argue I need to get over my irrational psychological issues, but I would argue that money is HIGHLY psychological. By doing something for “me” (saving money…no crazy spending or anything), I am more likely to be able to stay the course on this journey.

How We Fared in March

I was originally going to give you a big update (broken down by budget category) on how I fared for the month of March, but decided to start those updates next month, given that I have just now revised the budget and we didn’t even start blogging until the second half of March. (You can, however, see my debt update post from this morning!) I will say that we did well for the month (both in terms of lowered spending and extra earnings) and ended up with a surplus of $2225!!!

With this money, my husband and I decided to make some one-time “snowflake” payments toward debt.

  • $1,000 went immediately toward my Wells Fargo CC (with the 13.65% APR – note, this payment was not made until the beginning of April, so it is not included in this morning’s debt update)
  • $1225 went toward outstanding medical debt (note – this payment was made at the end of March, so it WAS included in this morning’s debt update).
  • And we decided to put an additional $1,000 toward Mattress Firm out of our savings (see Savings info in this post. note – this payment was also not reflected in this morning’s debt update).

I alluded to the medical debt snowflake payment in this morning’s post. I took the advice of several readers and called to ask for reduced rates in exchange for paying the bill in-full. In spite of my efforts, I was turned down by every single place (all 8 of the places I called). It was a huge bummer, particularly since it took half a day to make all the calls. I ended up using the $1225 to knock out a bunch of the smaller bills, leaving myself with 3 separate monthly payments (amounting to $150/month), and 1 monthly payment to the Mayo Clinic that is yet to be determined. Apparently, even though they are out-of-network, our insurance pays a flat rate of $100 toward our bill, which Mayo has not yet received. They will not discuss or set up a payment plan with me until that money has been handled so I’m not sure what we’ll owe them yet, but my guess is our medical debt will go up to probably about $200/month.

Charitable Donation Update

Also, as another random update to our discussion about charitable donations, we have decided to forego adding a line to our current budget for charity. In lieu of this, I am beyond thankful to Marie(!!!) for pointing out that in the state of Arizona, you can make charitable donations (up to a certain dollar amount) that give you a tax CREDIT (not deduction)….basically its like picking and choosing where your tax money goes (and if you are owed a refund, you actually get the money BACK at the end of the year). For any Arizona readers interested, HERE is a link to a list of qualifying organizations in the state (note – this may not be an exhaustive list. I’m not sure). This is how we will donate for the time being and if something happens to come up that we would like to donate more toward (generally these are the pay-it-forward/non”charitable” organization things I mentioned – like friends’ Go Fund Me sites), then it will have to come out of our “other” miscellaneous budget. If it doesn’t fit for the month, then we can’t donate. I feel good about this decision because it still allows us to give, but to do so in a way that won’t financially harm my own family.

 

Current Debt Monthly Payments

 

Debts Amount
WF(13.65%); 800
Sallie-Federal(8.25%) 62
Carmax (7.75%) 470
BoA (7.24%) 35
Sallie-DeptofEd (6.8%) 0
ACS student loans (7.24%) 25
MattressFirm (0%)  100
CJ License (0%)       55
Medical Debt 150
Total 1697

For those astute readers, you will notice we are paying nearly $1700 toward debt per month at this point. Yet, our budget only allots for $1550 per month. Clearly there will need to be other places where we cut back to allow for this ballooning debt payment (and hopefully Mattress Firm will fall off the list in another month or two). I’d also like to note that this budget is a work-in-progress. My hope is to continue reducing our expenses across the board in various categories, while simultaneously increasing our debt-payments. It’s a process (and I talked about some of the changes I’ve already made earlier today), so stick with me!

Anyone have Sprint as a wireless provider??? Want to do a Framily Plan?? (just kidding……but not really!) I think our phone bill (at $150/month) is SCREAMING to be slashed! The childcare expense has been another one weighing heavily on my mind. Perhaps it deserves its own post soon. Changes are on the horizon, folks!

Any big, glaring areas where you think I could cut back more??? What have you done to cut costs in your budget?