talha

How to negotiate medical collection account

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Hi,

I have a pending medical collections account that I want to settle (eventually removal from the credit report) to allow me to negotiate better mortgage rates.

Q1. I am not good with verbal negotiation. can I write it to the collections agency or ask a relative to negotiate on my behalf?

Q2. How much (%) discount should I ask for?

Q3. any tips on negotiation

Thanks

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6 hours ago, talha said:

I have a pending medical collections account that I want to settle (eventually removal from the credit report) to allow me to negotiate better mortgage rates.

If it is already reporting removal may not be possible.  Some CAs have a hard line policy against removing accurate information.

When you say "pending" do you mean it isn't reporting yet or it hasn't been sent to collection yet?

6 hours ago, talha said:

Q1. I am not good with verbal negotiation. can I write it to the collections agency or ask a relative to negotiate on my behalf?

All negotiations should be in writing.  Due to HIPAA laws the CA cannot discuss the account with anyone but you.

6 hours ago, talha said:

Q2. How much (%) discount should I ask for?

How old is this debt?  How much?  What kind of provider do you owe this too: doctor/clinic/hospital?  Did you use insurance and this is your out of pocket balance?

If you used insurance and this is your deductible, co-pay or co insurance you cannot get a discount off those amounts.  It is illegal rebating.

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Pending is not the right word. all I am trying to say that my account has gone to the collections agency and I haven't paid it at all

Here are the details

  • I have recently moved to the US and currently on a work visa, and I was new to the US health system
  • in August 2017, I took my son to the urgent care for head stitches. they told me that they would charge about $275 and if I go to ER, I will get better services, and they may not even charge me anything
  • So I took my son to the ER. After a few months, ER sent me two invoices, one for 1900 sh (doctor charges) and second of 1700 sh (ER charges). I called them, and then they took out doctor's fees as ER charges were inclusive of Doc's. so I was left with only 1700 sh
  • I told the situation to ER (re. UC's advise) and asked them to lower the fees to $275 as I was misled into this situation. They offered me a discount of 50%. (totaling around 900) Which I refused at that time as I was expecting $250 charges.
  • I asked the ER to try to charge the amount on my Canadian health card to see if I could benefit from that. Which they tried and got declined by Canada
  • By that time, I moved to a different address and never got the ER (and the collection agency)
  • last year, when I ran my credit, I realized that the account is now with collections
  • I called the ER billing department and explained the situation. and offered to pay them 50% in exchange for the delete of account from collections reporting
  • ER told me that they can't help in this matter as it is now with the collections and I should deal directly with the collections

my objective is to get the account removed from the credit reporting to improve my FICO score. Please advise

 

 

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14 hours ago, talha said:

I told the situation to ER (re. UC's advise) and asked them to lower the fees to $275 as I was misled into this situation. They offered me a discount of 50%. (totaling around 900) Which I refused at that time as I was expecting $250 charges.

So by now I am sure you are aware the ER had no reason or legal basis to honor a price guarantee made to you by another business.  Unfortunately that was not a reason to refuse to pay.

14 hours ago, talha said:
  • I called the ER billing department and explained the situation. and offered to pay them 50% in exchange for the delete of account from collections reporting
  • ER told me that they can't help in this matter as it is now with the collections and I should deal directly with the collections

Many collections contracts state that once the account goes to collections the provider cannot intervene.  Often this is because the CA gets paid based on a percentage of what they collect or volume of accounts settled.  You will have to deal with the CA.

14 hours ago, talha said:

my objective is to get the account removed from the credit reporting to improve my FICO score. Please advise

Whether or not the CA will agree to delete is entirely up to them.  If they will do it great but do not get your hopes up because as I said in the first post many have a hard line policy against doing this.  ANY settlement you agree to needs to have all terms in writing BEFORE you pay.  Whether or not you can get a discount now depends on how good of a negotiator you are.  You simply start with an offer and they either accept or decline.  If they decline they usually make a counter offer in the process.  It can go back and forth a couple of times until an agreement is reached.  DO NOT mention you want to buy a house as this gives up any leverage you might have.  

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I have previously disputed the information directly with the collections agency and with Transunion / Experian.    

  • Collections agency provided all details
  • Transunion/Experian verified account to be accurate
  • Its not showing up on Equifax

 

Here is what I have on individual reports (maxed the creditor names and dates)

Transunion:

Creditor Name: ABC FINANCIAL SERVICES
Original Creditor: XYZ MEDICAL CENTER
Responsibility: Individual
Condition: Derogatory
Date Opened: 10/5/2018
Date Reported: 05/25/2020
Remarks: Account information disputed by consumer, meets FCRA requirements


Experian:
Creditor Name: ABC FINANCIAL SERVICES
Original Creditor: XYZ MEDICAL CENTER
Account type: Collection Department / Agency / Attorney
updated on: Oct 1, 2018
collection opened: 10/5/2018


Equifax:
...

............ CREDIT KARMA website is suggesting that

  • If I pay off the debt in full then my FICO score will be boosted by +25 points,
  • settle for less will boost my credit by +21 points
  • removed will boost my credit by +23 points

 

 

Please advise next steps and would you agree with Credit Karma's suggestion to just pay it off

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21 minutes ago, talha said:

Please advise next steps and would you agree with Credit Karma's suggestion to just pay it off

First and foremost ANY score you get from Credit Karma is fake and not reliable.  It is NOT a FICO score it is a Vantage score which no mortgage company uses  Actually no creditor currently uses it.  You can go to MyFico.com and buy your actual credit reports from one or all 3 bureaus for a small fee and find out exactly what your FICO Mortgage scores are.

If you want a mortgage having a $1700 collection is going to do 2 things:  your score will be much lower making your interest rate be higher and odds are very high the underwriters will want the collection paid prior to approving the mortgage.  This is because if they sue you and get a judgment it can become a lien on the property.  You have the most leverage to settle this for less than they are asking if they do not know you want a mortgage.  Settling is about leverage and right now you have it.  If you let them know what your plans are the leverage shifts to them because they know you will be required to deal with the collection by the mortgage company.  Whether you pay it all off, settle for less. or wait until it falls off is up to you.

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