My wife was seriously hurt in an accident on April 2010 in California. There were large medical expenses, most of which were paid by insurance, but significant portions were out of pocket. The owner of the vehicle at fault had the legal minimum insurance. When our own auto insurance would not pay the $500K limit on our policy, we engaged an attorney. They negotiated with the hospital and the insurer to get what we believed were all of the outstanding debts paid. The attorney paid the hospital out of the proceeds from the insurer.
About 2 or 3 years later, we obtained a copy of our credit report and found a collection account in the amount of about $6,800 from a collection agency. We don't recall receiving a bill from the hospital for the outstanding amount. Nor were do we remember being notified by the Grant & Weber collection agency of a pending collection account. They just recorded us as in default and sent a derogatory report to the credit reporting agencies.
The terms of limitation for collecting the account exceeds four years, but the derogatory notice of the collection account remains on our credit report.
We paid the attorney 27% of the insurance settlement, an extremely generous amount considering the number of hours I estimate he actually put into the effort to collect from the insurance company. As our legal agent, he was responsible for paying all of the hospital bills from the insurer's proceeds, but did not. He told me last year last year to write Grant & Weber and tell them they could not collect the debt and to remove the collection account from our credit report. They refused and instead demanded I pay the amount due immediately and threatened to initiate court action. The attorney has gotten his share of the payout and is not helpful in resolving this left over debt.
Can I require Grant & Weber to show proof that they attempted to collect the debt from us before they put us in default? (Does it matter?)
Do we have any recourse for getting this collection account removed from our credit report? It's scheduled to remain on my wife's credit report through Sept 2017.