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According to the Consumer Financial Protection Bureau, medical debt is far and away the number one type of debt reported on consumer credit reports.  More than half of all debts in collection are medical debts.  An estimated 43 million consumers have at least one medical debt in collection.  Nearly one in five Americans will be contacted by a medical debt collector.

So, it’s important to remember that federal laws provide you with the same protections from medical debt collectors as for any other kind of debt collector.   In fact, under a recent settlement with the office of the New York State Attorney General, the three major credit bureaus (Experian, Trans Union and Equifax) agreed to wait six (6) months before reporting medical debts on credit reports in order to give consumers time to resolve billing and insurance disputes.  They have also agreed to remove delinquent medical debts from credit reports once those bills have been paid by insurance.  If a credit bureau continues to report delinquent medical debt after it has been paid by the insurer (and after you have disputed it with the credit bureau), they have violated the law.

Medical debt occurs at all ages and in every segment of the socioeconomic strata, including many people who are actually insured by employer-sponsored health plans.  In fact, medical debts are the number one (1) reason people file for bankruptcy.  Medical debts can impact your credit-worthiness and your credit score, making it harder for you to obtain a loan, rent an apartment or even get a job. 

Why are so many medical bills in collection?  Well, one explanation is that medical bills can be confusing.  A single inpatient stay at a hospital may generate several different bills, one from the hospital, one from the surgeon, one from the anesthesiologist, one from the laboratory, one from the pharmacy, etc.  It may be easy for consumers to think that all of their medical bills have been paid, while one or more are actually still outstanding.  Add to that the delay and confusion over whether (or how much) of a bill is covered by insurance, and the fact that hospitalization and medical issues can leave one physically and emotionally drained.  

Unlike other kinds of debt, the data suggests that most medical bills may be outstanding because of mistakes and disputes, rather than an inability to pay them.  A recent study showed billing mistakes in almost half of the Medicare insurance claims that were reviewed.  Moreover, half of the medical bills in collection are for $207 or less (smaller on average than many other types of debt), indicating that consumers may be able to pay the bills, but really don’t believe that they owe them.  

Sadly many times, it’s seniors who are the subject of hounding over medical debts.  Seniors often complain that collectors have already started calling while they’re still trying to correct billing mistakes or waiting for providers and insurers to resolve disputes, according to the CFPB. The Bureau reports that seniors complain that collectors are attempting to collect on bills already covered by insurance.   It can be frustrating and confusing, and the debt collector’s activity may be illegal.  

Ignoring these debts is the worst thing that you can do (because you think someone will discover it’s a mistake).  Chances are, it will just continue in the collection juggernaut.   Debt collectors will often sue people for the unpaid debt.  They count on people ignoring the lawsuit so that they can easily get a default judgment.  Once a judgment is in place, it is nearly impossible to remove and the debt collector may now start collecting that judgment by attaching your wages or putting a lien on your property. 

It’s important to remember that even though your medical bills might seem far different from your other bills, they are still considered consumer debts which fall under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).  These laws protect you from unscrupulous behavior. 

Debt collectors cannot misrepresent the amount of the debt.  They cannot call you before 8 a.m. or after 9 p.m. or any other time you tell them is inconvenient.  They can’t use or threaten violence, use obscene or abusive language, threaten harm to your property or reputation, make false or misleading statements, or send you documents that look like they come from a court.  They can’t call you at work if they know you’re not allowed to receive their calls there.  They can’t broadcast your debt to others, or tell you that you are going to jail if you don’t pay.  They have to give you certain information about the debt and tell you how you can dispute the debt or seek verification.  If they violate these rules, you may be able to sue them for monetary damages.  


If you need help, contact the Law Office of Mary Higgins at 302-894-HELP (4357) –

The most important thing for you to do is answer the lawsuit in court. It can be intimidating to be sued and to be served with a summons and complaint. But don’t ignore it. Just by filing your answer within the time limit set by the court, you can change the odds to your favor.

Debt collection is a billion-dollar industry generating huge profits for companies that buy up bad debt and then try to collect on it. Debt-buyers typically pay between 3 and 8 cents on the dollar for batches of debt that credit card companies, banks and others have written off. In some ways, it’s just a numbers game. And they play the odds. So if they can collect more than 8 percent, they make a profit. If they can collect 100 percent from you, they’ve just made a huge profit.

And one of the easiest ways for debt collectors to do that is to file a lawsuit and get a default judgment. When you are sued, the general rule is that if you just ignore the lawsuit and don’t answer it in court by the date set, your failure to answer can lead to a default judgment against you for the entire amount of the lawsuit. And the plaintiff doesn’t have to prove much beyond that he sued you and you defaulted, or failed to answer. Debt-buyers have made fortunes with this strategy. In one New York study, it was found that third-party debt collectors got default judgment in 81 percent of the cases they filed.   If you don’t answer a lawsuit, you make it easy for them to get a judgment. Then they may be able to garnish your wages or seize your property. And your chances of eliminating that judgment are close to zero.

Your best bet is to stop them from getting the default judgment in the first place. And to do that, you must answer the complaint. A good consumer lawyer will help you answer the complaint and assert all of your defenses. Now the debt collector can’t just claim you owe him money, he must prove it in court.

When debt buyers purchase big batches of debt for pennies on the dollar, they get lists of names and addresses, account numbers and amounts. And they aggressively pursue consumers on those lists. They’ve got phone banks and automatic dialers and lawyers and collectors.

But there’s one thing they likely don’t have: the documents to prove the debt exists. Fewer than 1 in 8 accounts purchased by debt buyers come with documentation of the debt, according to a report by the Federal Trade Commission. That gives them less than a 12 percent chance that they can prove that debt to a court. The other 88 percent chance is with the consumer. So now the odds have changed.

If you need help, contact the Law Office of Mary Higgins at 302-894-HELP (4357) –

Mary Higgins Delaware Attorney


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