OSI Collection (Medical Bills)

[pierce894]

A few years ago I had a bad car accident spending months in the hospital recovering from some serious injuries. As a result, I now owe the hospital A LOT (what my insurance could not pay), and my accounts are now with OSI Collection Services.

My question is this.....which is better? To pay off these accounts or do a "pay for deletion" letter instead? Which will result in my FICO score being raised? I want to buy a house, and have been working for the past year to clean up my credit reports.

Thanks for your help!

[Ahntara]

If you have the capability to pay the debts; work with the OC (medical provider). They can withdraw the debts from the CA's. Once withdrawn, there will be nothing for the CA's to verify.

Most CA's will not remove their TL's. You might be able to get this accomplished on medical debts, but it's always a long shot. If you choose to go this route, make sure you obtain a signed statement (from a person authorized to make the promise) that they will remove the entry upon payment. That way, you can at least sue them when they fail to comply.

Personally, I think it's always easier to go through the hospital/doctor's.

Mortgage lenders generally disregard medical debts. They understand the state of modern American healthcare and will not force you to pay them off as a condition of the loan. The debts will continue to impact your score however.

[Robert Nashville/Savannah]

If I might be so bold as to offer a different view…

I would suggest your first step, if you haven’t already done so, is to nail down exactly what you truly owe. The level of mistakes and outright incompetence in medical billing today is staggering…I’ve seen $40,000 hospital bills reduced by two-thirds after an in-depth reconciliation by someone who knows what they are doing. Once you know what you really owe then you can take the next step.

The next step being to try an reach an accommodation with the hospital…do so face to face with someone of real responsibility (the hospital administrator for example) and if you need to ask for mercy then ask for mercy (forgiveness of part of the debt).

Finally, whether you do a PFD or not is really not the point…you do not need to be held hostage to your FICO score. Two or more years of paying your rent on time or early along with being on time with all other obligation (utilities, etc) and no current/recent bad debts will qualify you for a traditional mortgage at the best going rates so long as you seek out a lender/broker who does real underwriting.

I know many here don’t buy that because they’ve bought into the lie, perpetrated on the public by the debt industry, that the only way to live is with a high FICO score but it truly is a lie.

Good luck.

[pierce894]

Thank you both for your suggestions. It's helped me a lot! I appreciate it.

[PolarBearnCO]

If you have the capability to pay the debts; work with the OC (medical provider). They can withdraw the debts from the CA's. Once withdrawn, there will be nothing for the CA's to verify.

How would you go about asking the OC to withdraw the debt from the CA? Does the OC have the power to "force" the CA to remove their TL? Or, would you ask that the TL be removed prior to payment?

I'd like to settle my medical debts for deletion. I have done nothing so far. I'm waiting for December to start making my move, as I am going to pay them off in one tax year (2007) to maximize deduction.

Thanks.

[momof5]

One can call the OC and have them pull the account back. I have done this. They will usually tell the CA that it was sent in error. The CA acct is deleted from the CR.

As far as going for a mortgage, most today will not consider medical collections when they determine your ability to get a mortgage. They remove the CA account and rescore.

Robert is right about your track record in paying rent will overshadow any dings on the CR. For me, I am lucky. As a veteran, 1 year of good payments and I can get a VA loan. I was able to do this 18 mo out of a Ch7 BK!