Collection agency would not accept my offer of $30/mo while I'm on SS disability. My debt is $12,700

About 8 months ago I was put into collections for medical services (FROM 2007) that were denied by my Insurance Co. due to non-covered post-op visits from surgery. The visits were in dispute for 7 months prior to the date that I was put into collections. I was paying the medical billing facility each month directly before I was put into collections.

When the collection agency called my cell phone I offered them $30-35/mo due to the fact that I am on SS Disability and have been for over 2 years. Needless to say they would not accept this. I was TOLD (Rudely) it had to be $200/mo even given my financial situation. My response was "If you want your money back, this is what I can afford for now".

The agency keeps leaving voice mail messages (Approximately 60 so far) on the cell phone. I've been avoiding the agency and have asked thay do not call me anymore prior tp the pre-recorded voicemails Unfortunately, I deleted them before I came into this site.

I'm always on time with ALL my bills and credit card payments. It's not my style not to be responsible to pay me debts.

Five Questions:

1. Was it legal for the medical facility to put me into collections while making payments?

2. Being on SS Disability, is there a way I can have this "pardoned" by the collection agency and 3 credit bureau's?

3. Do the credit bureaus take into consideration my history of faithful bill payments?

4. Can the medical facility sue me?

5. Where do I go from here?

Debt collectors who collect medical bills are covered by the Fair Debt Collection Practices Act (FDCPA). While that law does not require them to accept whatever you can afford, it does prohibit certain practices - including harassment. Calling repeatedly and excessively when you have explained your situation and are doing the best you can may qualify as harassment. (There are no specific guidelines here, it is left up to the courts to decide.)

If I were in your shoes, here's what I would do:

1. I would contact the medical facility and insist that they take the debt back from the collection agency. I would explain my situation, that I was making payments, and that I suspect the collection agency may be illegally harassing me. I would tell them my other alternative would be to consult an attorney about bankruptcy and/or suing the collection agency which could drag them into the case. I would send my letter by certified mail to the top person at the medical facility.

2. I would start keeping a written record of every phone call/voice mail from the collection agency. I would also take notes of any conversations I have with them. I would also write down notes about any conversations with them I can recall.

3. But I would only do the above after I had consulted with a consumer bankruptcy attorney. With the size of your debt, you won't be able to make a dent in it with the payments you are proposing.

As to your other questions, it is probably perfectly legal for the medical provider to turn you over to collections, unless they had agreed not to do so if you continued making payments.

And unfortunately, once a collection account is on your credit report, the damage is done and it's pretty severe. Credit scores reflect your risk at that moment in time. Yes, they take into account everything else on your credit report, but you're also deemed higher risk because of the collection account. However, if you could get the medical facility to pull back the debt, then you may also be successful in getting the collection account removed by disputing it. (I am not saying it will be easy, but it's worth a try.) Realistically though, how likely is it you will need credit in the near future?

Finally, because your only income is disability income, you may be what's called "judgment proof." That means even if they sued you they couldn't go after your income to collect. The attorney can help you determine whether that's the case. If so, you'll have a lot of negotiating leverage with the collection agency and/or medical provider if you want to try to get the amount of the debt lowered. If you know you are judgment proof, and you tell them, suing you would be a waste of their time and money. You can
consult a bankruptcy attorney consult a bankruptcy attorney on this issue for free.

Please let us know what happens.