nrgins

Advice for negotiating with CA

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My son (an adult) owed $800 to a doctor's office which he didn't pay because at the time he thought it was an unfair charge. He didn't realize it would go on his credit report, etc.

The debt was sent to a collection agency for payment, and now he wants to pay it so that at least his credit report will show that it was paid, even though it will still be a black mark on his credit report for some time. (The debt is only 1 year old.)

I was wondering if a CA would be willing to accept a smaller payment in exchange for the debt being paid in one payment. Would be interested in people's opinions about whether this would be possible; what amounts they might accept; and any tips for how to negotiate with collection agencies.

Also, is it possible to have the collection agency remove it from his credit report altogether in exchange for payment?

Thanks!

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You can try to do a PFD if you are willing the pay the whole amount. However, realize they will not negotiate if they think you can pay the whole amount so if you decide to go that route and the CA refuses, you will probably need to let the debt age.

Otherwise, it is simply negotiating with the CA and like any other negotiation, he who has the most info wins. The suggestion would be to claim poverty and whatever amount you can come up with is all you can come up with and they either need to take it or wait and hope you can come up with more. It will take more than one phone call to I would start low and work up to the max I am willing to pay.

Two rules when dealing with a CA in negotiation:

1) Get the deal in writing. If it is not in writing, it did not happen. You know a debt collector is lying if their mouth is moving.
2) NEVER allow electronic access to your bank account. They will take the whole amount even if you agreed to something else. Instead, send a money order or cashiers check overnight.

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7 hours ago, nrgins said:

I was wondering if a CA would be willing to accept a smaller payment in exchange for the debt being paid in one payment. Would be interested in people's opinions about whether this would be possible; what amounts they might accept; and any tips for how to negotiate with collection agencies.

Whether they CAN accept less than the amount owed depends on whether or not he used insurance.  If this is the portion that the insurance carrier did not pay then legally they cannot accept less than owed as it is illegal rebating.  If he did not have insurance then it may be possible to negotiate a lower price on the care if he is going to pay in full at that time.  All he can do is make an offer and see if they accept his terms.

7 hours ago, nrgins said:

Also, is it possible to have the collection agency remove it from his credit report altogether in exchange for payment?

Nothing in the law prohibits them from doing that however some creditors and collectors have a hard line stance against doing it.  You cannot force them to.

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You can try to do a PFD if you are willing the pay the whole amount

I'm sure he'd rather get a PFD, even if it means paying the full amount. I mean, it's only $800, and the debt is only a year old. Would definitely be worth it. Any advice on getting a PFD?

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Whether they CAN accept less than the amount owed depends on whether or not he used insurance.  If this is the portion that the insurance carrier did not pay then legally they cannot accept less than owed as it is illegal rebating.  

Yes, he had insurance at the time. But, since the doctor wrote off the debt, and it's now in the hands of a collection agency, wouldn't that not apply anymore, since it wouldn't be the doctor giving him the "discount"?

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2 hours ago, nrgins said:

But, since the doctor wrote off the debt, and it's now in the hands of a collection agency, wouldn't that not apply anymore, since it wouldn't be the doctor giving him the "discount"?

The debt being in the hands of a collection agency does not mean the physician wrote off the debt.  It simply means they have handed off collection efforts to a third party so they can continue to provide care to patients.  The money collected still goes back to the provider so no, a discount is not possible once the insurance claim was filed on the care.

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10 hours ago, Clydesmom said:

The debt being in the hands of a collection agency does not mean the physician wrote off the debt.  It simply means they have handed off collection efforts to a third party so they can continue to provide care to patients.  The money collected still goes back to the provider so no, a discount is not possible once the insurance claim was filed on the care.

OK, that makes sense -- provided they haven't written off the debt.

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3 hours ago, nrgins said:

OK, that makes sense -- provided they haven't written off the debt.

"Written off" or charged off are merely accounting terms which have ZERO affect on their ability to continue to collect from your son.  It also has NO affect on their contractual obligation with the carrier not to discount the amount he owes.  When a creditor "writes off" a debt it merely means that the amount owed is being considered a liability and not an asset at that time.  

MANY creditors charge off accounts after 6 months of no payments only to sue a year or two later and collect.  The charge off in no way affects their ability to ask the court to award them the full amount owed.  In your son's case if the debt was written off to bad debt it also doesn't mean they have to stop reporting either.  They can legally report the debt 7 years past the date of the care he received.

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I have to ask this Clydesmom, what happens if the issue gets into court. Will the attorney for the plaintiff actually look at the overworked judge and say they cannot negotiate because of a contract obligation? I am sure that would not go over too well and the attorney may find that the judge looks through everything to try to find a way to dismiss the suit if they can.

I do know for a fact that BK breaks that contract obligation so I know that federal (and possibly state ) law does trump what is in the contract and probably does a  judges order.

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8 hours ago, WhoCares1000 said:

Will the attorney for the plaintiff actually look at the overworked judge and say they cannot negotiate because of a contract obligation?

Not at all.  Whether or not they CAN discount isn't an issue in the court case.  The did the patient get the care, did they sign the financial agreement, the amount owed, and when they stopped or didn't pay.  PERIOD.

8 hours ago, WhoCares1000 said:

I am sure that would not go over too well and the attorney may find that the judge looks through everything to try to find a way to dismiss the suit if they can.

You are wrong.  If the provider is contractually obligated not to discount the patient portion then the court is not going to frown on them because they didn't.

8 hours ago, WhoCares1000 said:

I do know for a fact that BK breaks that contract obligation so I know that federal (and possibly state ) law does trump what is in the contract and probably does a  judges order.

BK law is entirely different because the court dismissed the debt based on the insolvency of the debtor.  No judge is going to over ride a valid contract with the insurance carrier requiring a patient to  pay less simply "because."  "I think they should take less money" is not a defense to the bill you owe for the care you received.  

The sword actually cuts the other way most of the time.  The patient gets the care and they have no insurance.  The provider discounts the amount owed and they still don't pay.  If it goes to court the patient/debtor has an impossible time explaining to the court why they got the discount and still didn't compensate the provider for their work.

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On 5/11/2016 at 9:42 AM, Clydesmom said:

"Written off" or charged off are merely accounting terms which have ZERO affect on their ability to continue to collect from your son.  It also has NO affect on their contractual obligation with the carrier not to discount the amount he owes.  When a creditor "writes off" a debt it merely means that the amount owed is being considered a liability and not an asset at that time.  

MANY creditors charge off accounts after 6 months of no payments only to sue a year or two later and collect.  The charge off in no way affects their ability to ask the court to award them the full amount owed.  In your son's case if the debt was written off to bad debt it also doesn't mean they have to stop reporting either.  They can legally report the debt 7 years past the date of the care he received.

I am talking about whether they SOLD the debt or still own it, that's all. If they sold the debt to a JDB, then it's no longer theirs.

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2 hours ago, nrgins said:

I am talking about whether they SOLD the debt or still own it, that's all. If they sold the debt to a JDB, then it's no longer theirs.

It is rare that medical debt is sold because of HIPAA.  Usually it is large hospitals that sell debt if they are going to not individual physicians the steps necessary don't make it worth it. 

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