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$40000 in medical debt in collections...how to fix?


danstelter
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So that's our problem. Right now, we have great insurance with a low out-of-pocket cap ($2500 on the year). Everything after that is paid out at 100% except for co-pays etc...

 

But the damage is done. It's all in my wife's name at this point, and I don't have any significant health issues. But hers are a constant, steady stream, for whatever reason.

 

Now to add to the difficulty, I am self-employed and have wavy income. It's growing, so that's good, but I'm not sure what we're going to have each month at the moment. However, I expect to make $70,000 - $80,000 by the end of the year. My wife works sparingly because of her health problems, so her income is very negligible (few hundred per month). 

 

We still have medical bills rolling in, although I think all the big ones are in collections now. I have heard collectors don't go too aggressively for bills < $1000 in value. 

 

So my strategy at this point is to let the little ones pile up, and focus on settling the big ones - There's one for $17,576 and another for $7830. Creditors will likely sue for those big guys, so I want to get rid of those first. Plus, my income is increasing, so that makes it easier to take care of these big suckers.

 

Now, we just settled a worker's comp suit for $6500, so we have that and some cash at our disposal (about 7-8 months living expenses). 

 

So it makes sense to settle the two big dogs, right? And then just take care of the rest from there? 

 

I want to know how to negotiate these suckers down as much as possible, and what sort of process I should follow (I don't know how it works and I know collectors can be awfully deceptive). 

 

I'm not clear on the dates, but I think the statute of limitations in WI is 7 years, correct?

Plus, don't you have to pay income tax on the amount of money you settled? 

 

What happens if I get sued? How do liens work?

Sorry, I have a lot of questions and have no good resources for help at this point. Hope you all can help me figure out what to do. 

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we have great insurance

 

I want to know how to negotiate these suckers down as much as possible, and what sort of process I should follow (I don't know how it works and I know collectors can be awfully deceptive). 

 

You cannot negotiate these bills down any further.  It is illegal rebating and the providers will NOT do it.  You are contractually obligated to pay your out of pocket amount.  The provider cannot and will not give you a further discount over and above the contracted rate which is discounted from the billed amount.

 

Medical collections is NOT like credit card debt as it typically is not sold and is very easy to prove the amount owed.

 

I'm not clear on the dates, but I think the statute of limitations in WI is 7 years, correct?

Plus, don't you have to pay income tax on the amount of money you settled? 

 

The SOL on written agreements which is what medical debt is because you sign a financial guaranty before being treated is six years not seven. 

 

If the provider were to settle for a smaller amount the difference would be taxable income to you, yes.

 

What happens if I get sued? How do liens work?

 

If you get sued and you lose they get a judgment against you.  They can put a lien on your house, garnish paychecks, and levy bank accounts.  

 

The lien on your home would prevent refinancing or selling until you satisfy it.  Judgments are good for 10 years in WI and there is also post judgment interest.

 

With the amount of debt you have and being self employed you really should be speaking to a BK attorney.  Once consequence of filing BK against medical providers though is that they could discharge your wife from their care.  Providers are increasingly refusing to continue to provide care when patients rack up a lot of debt and then leave the provider in the red on it.  They do not allow the patient to continue receiving care and generate more debt that could potentially go unpaid.

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Hey Clydesmom,

 

Where in the OPs post did you see that insurance was involved in these past due medical bills? All I got from the OP is that they have good insurance now, not when these bills were created.  Without insurance involved, the OP can negotiate these bills all they want as there is nothing illegal about settling a bill between 2 parties where a 3rd party is not involved. BTW, I can understand the issue where insurance in involved because it would violate the contracts between the 3 parties.

 

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You can negotiate a lower payment, especially if its in the hands of a debt collector. Check the home page of this website (right hand side of the page) for your state's statute of limitations.

 

If your wife was uninsured, an approach to take is to request the application of the medicare rate schedule to her bill. Many medical providers will agree to this for uninsured patients. Also, insist on an itemized bill to review. If any of her medical care required hospitalization, you're likely to find overcharges or inflated charges that can be negotiated down.

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