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Medical Debt Collection Update


Back in January I wrote about how I’d accepted a settlement offer to pay off an old medical bill for less than what we really owed (we paid $3,647 and they forgave the remaining balance of the $5,610 debt). So for the past 3 months we’ve been making huge ($1215/month) payments.

The last payment was April 17th. I did a little happy dance, and celebrated with hubs about how the last of his medical bills from his mystery illness (which occurred in the fall/winter of 2013) was finally paid in full. Every time a bill has been paid in full, I always like to reflect back on the item that caused us to go into debt, and to be thankful to move on from having it be a part of our lives. In this case, the “item” that caused us to go into debt was emergency medical care. Hubs was hospitalized off-and-on for a 2 month period (longest stay was 10 days). We traveled around to see specialists, only to come up empty-handed as no one seemed to have any answers. Hubs has long since recovered, but the medical bills continued. We had insurance coverage at the time (thank goodness – as we literally bought his insurance only 3 months prior to the mystery illness’ onset). But even with insurance, we had to pay co-pays and deductibles. Our medical bill originated at $9,000 (read more about it in my first ever debt post, from back in 2014). Moving on past that debt is definitely symbolic in our lives – putting behind us a scary time and moving forward with faith and hope. Like the effort to move forward in hope, brandishing the metaphorical bruises and lessons learned of the whole IRS debt situation. It parallels how I feel about my dad’s current medical situation. The past couple years have had some heavy burdens but I feel hopeful about the future, even with the inherent challenges of moving a parent to a live-in care facility (my dad has FTD and is soon moving to a dedicated memory-care facility).

So I feel hopeful. That’s my underlying feeling these days.

That is….until I just received a phone call from the medical debt collector (referenced in this post). They called and asked how I planned to pay the remaining $1963 balance. You know, that balance I have in writing that would be forgiven as part of the debt settlement agreement? After explaining the settlement situation, I was told that the account would be forwarded to the business department to be straightened out. I pray this was a one-time mishap and not signs of a battle-to-come. I do have the full settlement letter, so hopefully that should be enough to make the problem go away easily. Cross your fingers for me!

Happy Monday!


Texan at heart; Arizonan on paper. Lover of running, cheese, camping, and family (fur-family included!). Blogger, motivated to get out of debt YESTERDAY! Follow along with my journey!

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  • Reply Sarah |

    You just cannot win. Between the issues with the student loan processor and now the debt that they say you still owe even though the letter says you don’t, getting out of debt is going to make your life much easier!

  • Reply Lisa |

    I too had a collection that I had an agreement to pay said amount and the rest would be forgiven. The next month, someone new would call me and try to make the same agreement again for the new “remaining balance”, and one last time until it was paid. They never had any record of the employee I made the prior agreement with nor did they have the agreement! I was so young and didn’t know how to take care of the proof so it was paid in full after the third agreement.

  • Reply Lori |

    These types of debts don’t really go away. The companies that hold the “written off” debt sell the unpaid portion to other debt collectors to make back some of what they negotiated as a write off. You will have to be diligent and send copies of your agreement to this new agency to show that the negotiated debt was paid in full. Note that doing so may not keep this agency, or a new agency since this debt may be sold again, from continually contacting you. This is an example why it is best to pay a debt in full if you don’t want to be hounded by collection agencies.

    • Reply Marzey doats |

      This isn’t a charge off. Once the forgiven debt has been reported on a 1099-C it is uncollectible.

  • Reply Maureen |

    Hence, why you have the letter! The left hand literally doesn’t talk to the right with collection agencies and they used disconnected software systems/reporting methods. If you can get it, ask for a settlement in full letter now that the debt has been settled per the written terms.

  • Reply Lori |

    I disagree with those stating that all will be quiet on the medical debt front just because you have a letter stating you paid a negotiated settlement. Your debt holder sold the debt to another firm. This isn’t a case of the left hand not knowing what the right hand is doing; it’s a case of a sold debt that will and can rear its head in the form of debt collection letters/phone calls. Just try to be vigilant and persevere, but these firms will not go gently into that good night.

    • Reply Maureen |

      Lori, it can actually be the left hand not talking to the right (systems are updated haphazardly and all too often the billing/collection system does not reconcile with the settlement cycle for months, if at all). In other cases you could be correct. The debt could have been sold. However, the settlement letter and some annoying due diligence by Ashley (which may have to be repeated multiple times) can take care of the problem. The debt collectors are breaking the law (the FDCPA) by contacting Ashley on a settled debt. Yes, actually submitting a claim on that would take a lot of work that is probably not worthwhile. However, the law is on her side.

      I am a former bankruptcy attorney (I now practice in corporate law) and spent more than a decade assisting hundreds of clients in collection matters just like these. I have seen this pattern time and time again.

  • Reply Chantal |

    Don’t forget that the amount forgiven needs to be added to income for next year’s IRS return.

    My advice is pay the amount and be dnen with it; you can afford to do so and it is remaining a black mark on your credit rating while a bill collector is active.

So, what do you think ?