Jinxo

Help With Debt Dispute Michigan

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10 months ago my dog was taken into an animal hospital due to low red blood cell count but otherwise completely healthy 11 year old dog. 48 Hours later he was dead. I paid a $1k deposit when first checking into the place and that is all I have paid thus far. The animal hospital never contacted me to collect and I figured it was because they acknowledge some responsibility for the dogs death, which I believe they are atleast somewhat responsible. Regardless, I got a letter from a collection agency demanding the remaining $4k payment. I may or may night hire legal help but I am first wondering some general questions:
1. At what point can a debt collection agency put a claim on my credit report? I have excellent credit and do not want to ruin it, but I cannot imagine that any collection agency can just ruin someone's credit but claiming they are owed money without having to prove it through some sort of legal process?
2. The letter said 30 days to pay up. I responded with a certified letter requesting proof of charges and their right to collect on behalf of the animal hospital. I have yet to hear back from them and received a second warning letter but not sure what to do?

Any help or insight is greatly appreciated

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1 hour ago, Jinxo said:
 

10 months ago my dog was taken into an animal hospital due to low red blood cell count but otherwise completely healthy 11 year old dog. 48 Hours later he was dead. I paid a $1k deposit when first checking into the place and that is all I have paid thus far. The animal hospital never contacted me to collect and I figured it was because they acknowledge some responsibility for the dogs death, which I believe they are atleast somewhat responsible. Regardless, I got a letter from a collection agency demanding the remaining $4k payment. I may or may night hire legal help but I am first wondering some general questions:
1. At what point can a debt collection agency put a claim on my credit report? I have excellent credit and do not want to ruin it, but I cannot imagine that any collection agency can just ruin someone's credit but claiming they are owed money without having to prove it through some sort of legal process?
2. The letter said 30 days to pay up. I responded with a certified letter requesting proof of charges and their right to collect on behalf of the animal hospital. I have yet to hear back from them and received a second warning letter but not sure what to do?

Any help or insight is greatly appreciated

Yeah, they could put it on your credit report.  If it is false, you can dispute with the CRAs, and if you really believe this is false, you could file a suit against the collection agency for FCRA violations if they report falsely.  This is NOT easy to do.  But then, maybe they won't put it on your credit report.  

 

I don't know exactly what was in the letter you sent them.  I hope you sent it CMRRR, and I hope you kept a copy.  If what you wrote amounts to a DV letter, and they didn't validate but continued to collect anyway, they could be liable for a violation of the FDCPA.  You need to prove it, though.  

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1 hour ago, BackFromTheDebt said:

 I hope you sent it CMRRR, and I hope you kept a copy.  If what you wrote amounts to a DV letter, and they didn't validate but continued to collect anyway, they could be liable for a violation of the FDCPA.  You need to prove it, though.  

I'm not sure what CMRRR is but I sent it from the US Postal Service Certified Mail Receipt that shows their name/address on it and the date as 6/1/20. The letter I sent requested verification of the debt, but does me sending that letter require them to WAIT before posting any debt to my credit?

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45 minutes ago, Jinxo said:

I'm not sure what CMRRR is but I sent it from the US Postal Service Certified Mail Receipt that shows their name/address on it and the date as 6/1/20. The letter I sent requested verification of the debt, but does me sending that letter require them to WAIT before posting any debt to my credit?

That is CMRRR.  Good for you.

I really don't know if vet debts are considered consumer debts or not.  For some strange reason, necessary human medical debts are NOT considered consumer debts.  They are business debts.  I don't understand the logic.  However, cosmetic surgery is considered consumer debt.  It is possible that vet debts are also not considered consumer debts.  But your local court might think they are.  Courts don't always agree.  For example, some courts consider student loans to be consumer debts, while others do not.  

If the vet debts are consumer debts, then they have violated the FDCPA by continuing to collect after your DV letter.  If not, then they haven't violated consumer laws.  The law seems to be a bit grey in this point, unless there is case law I can't find easily with Google.    

What does that mean?

You are liable for vet bills.  If you believe your dog's death was a result of malpractice, then you have a counterclaim of malpractice, which could wipe out the debt and maybe they would have to pay you.  However, the burden is on you to show malpractice.  

The fact that they didn't send you the bill before going to collections is a horrible business practice, but they haven't broken any laws by doing so.  

If the local court thinks this is a consumer debt, then you have a claim against the collection agency.  

Generally, if you get a bill, you have a certain amount of time to contest the bill.  They cannot sue you for account stated if they never sent the bill, though.  They CAN sue you for not paying vet services.  

What would I do in your shoes?

Well, I wouldn't pay a bill when I have never even seen the bill.  If they won't send you a copy of the bill, you have no way of knowing if the charges are valid.  I wouldn't pay them.  You asked for the bill, and never got it.  You could call them or send them a letter saying you won't pay a bill you have never seen.  

 

If I were in your shoes I might call up the vet and ask them why you are getting dunned by a collection agency for a bill you never received.  They might say they won't deal with you because it is in collections, but they might actually work with you.  It is possible they really did deliver $5000 in services, doing the best they could to save the life of your pet, but it was hopeless.  They certainly have at least a moral obligation to work with you on this.  

At some point this might go to an attorney.  It is doubtful the collection agency would sue you, but the vet might.  Which is why I suggested talking directly to the vet's office.  

 

But a bill is crucial.  I have refused to pay when I haven't gotten an itemized statement.  To the extent that I walked away from $60-70k in debts from a major bank that never was able to send me any proof I actually owed money.  

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11 hours ago, Jinxo said:

1. At what point can a debt collection agency put a claim on my credit report?

30 days after the amount was due.  And no, they do not have to notify you before reporting to the bureaus.

11 hours ago, Jinxo said:

2. The letter said 30 days to pay up. I responded with a certified letter requesting proof of charges and their right to collect on behalf of the animal hospital. I have yet to hear back from them and received a second warning letter but not sure what to do?

If the second warning letter stated the name of the vet and the amount owed then that is all that is required to validate the debt.  They do not have to send you proof of anything as part of validation except a judgment if they already had one.  They would only need proof as evidence in a lawsuit.  They also do not have to prove they have a right to collect.

7 hours ago, BackFromTheDebt said:

I really don't know if vet debts are considered consumer debts or not.

They are.  Pets are property despite the emotional connection we have to them.

7 hours ago, BackFromTheDebt said:

For some strange reason, necessary human medical debts are NOT considered consumer debts.  They are business debts.  I don't understand the logic.  However, cosmetic surgery is considered consumer debt. 

I have NO idea where you go that nonsense.  Care for people IS a consumer transaction.  Payment is made for care rendered.  The difference is that when it comes to care for medical care for people the provider or their CA cannot report it to the bureaus until 6 months after the date the care happened to give insurance claims sufficient time to be fully completed.  After that 6 months elapses all bets are off and they can report.

7 hours ago, BackFromTheDebt said:

What would I do in your shoes?

Call the vet.  Ask for the itemized statement.  Once you have reviewed it then ask to discuss the charges and be VERY careful how you question their care.  If you are sued you cannot just allege malpractice happened.  You have to PROVE it and that burden is on you.  While you are waiting on that itemized statement take a peak at your local small claims court website/docket.  See if that CA or the vet practice shows up as a Plaintiff.  (some states allow a CA to sue on behalf of a provider) If either does appear then you know they are likely to sue you as well.  If they are likely to sue then once you get the bill try and negotiate a settlement.  This is way better than a judgment.  If the are not known for suing then what you do regarding payment is up to you.

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5 hours ago, Clydesmom said:

I have NO idea where you go that nonsense.  Care for people IS a consumer transaction.  Payment is made for care rendered.  The difference is that when it comes to care for medical care for people the provider or their CA cannot report it to the bureaus until 6 months after the date the care happened to give insurance claims sufficient time to be fully completed.  After that 6 months elapses all bets are off and they can report.

 

From the NOLO web site:

https://www.nolo.com/legal-encyclopedia/consumer-non-consumer-debts-bankruptcy-means-test.html

Quote

Medical bills. Surprisingly, necessary medical expenses are often classified as non-consumer debts and therefore qualify as business debts. As with tax debts, this is because usually, you don't voluntarily "incur" medical debt. If the medical expense is for elective cosmetic surgery, however, it could be classified as consumer debt.

THAT is where I got "that nonsense".  I agree it is nonsense, but judges call it business debt rather than consumer debt. 

If you got that one wrong, then how certain can anyone be that your assertion that vet bills are consumer debt is correct?  I would think they are, but it would be extremely careless to claim vet bills are consumer debt without any case law to back it up.  

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@Jinxo

It is not true that a response to your validation request could simply provide the name of the vet and the amount owed.  Here’s a FDCPA ruling from the MI federal court.  See Scarbrough v. Rausch, Sturm, Israel, Enerson, & Horlick, LLP (E.D, Michigan, 2018).  In  response to a validation request, the debt collector sent the following:

Here, in response to Plaintiff's verification request, Defendant Rausch sent Plaintiff a letter which stated: "The original creditor is Synchrony Bank (Sam's Club personal Credit) and the current owner's name and address is CROWN ASSET MANAGEMENT, LLC, 3100 BRECKENRIDGE BLVD, STE 725, DULUTH, GA 30096. As of date of this letter, the current balance is $1,375.68”

The MI federal court  ruled that, based upon Haddad v. Alexander, Zelmanski, Danner & Fioritto,  (6th Cir. 2014), the response was insufficient to verify the debt  

“Here, the verification did not state where or when the purchase took place. It also contained very little information on the nature of the purchase by referencing only ‘Sam's Club Personal Credit,’ the amount, and the names of the financial institutions. Under Haddad, this letter did not provide enough information ‘from which the consumer could sufficiently dispute the payment obligation.’" 

Judge the 2nd letter sent to you accordingly   

 

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28 minutes ago, BackFromTheDebt said:

From the NOLO web site:

https://www.nolo.com/legal-encyclopedia/consumer-non-consumer-debts-bankruptcy-means-test.html

THAT is where I got "that nonsense".  I agree it is nonsense, but judges call it business debt rather than consumer debt. 

If you got that one wrong, then how certain can anyone be that your assertion that vet bills are consumer debt is correct?  I would think they are, but it would be extremely careless to claim vet bills are consumer debt without any case law to back it up.  

In terms of bankruptcy, medical debts might be classified as “business debts”, but the 6th Circuit’s ruling in Haddad v. Alexander, Zelmanski, Danner & Fioritto made no reference to that.  Perhaps it’s because of a requirement  in bk of “voluntarily incurred”?  The FDCPA makes no such distinction between voluntarily or involuntarily incurred.  

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6 hours ago, Clydesmom said:

If the second warning letter stated the name of the vet and the amount owed then that is all that is required to validate the debt.  They do not have to send you proof of anything as part of validation except a judgment if they already had one.  They would only need proof as evidence in a lawsuit. 

According to Haddad v. Alexander, Zelmanski, Danner & Fioritto,  (6th Circuit Court of Appeals which is where the OP is located), a response such as you describe would be insufficient. 

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@BV80 FYI--Michigan law requires that verification includes the number and amount of previously made payments:

339.918 Communication with consumer; notice; effect of disputing validity of debt; verification of debt; failure to dispute validity of debt.
Sec. 918.

  (1) Within 5 days after the initial communication with a consumer in connection with a collection of a debt, a collection agency shall send the consumer, unless the following information is contained in the initial communication or the consumer has paid the debt, a written notice containing all of the following information:
  (a) The amount of the debt owed.
  (b) The date the communication was sent to the debtor.
  (c) The name of the creditor to whom the debt is owed.
  (d) A statement specifying that unless the consumer, within 30 days after receipt of this notice, disputes the validity of the debt, or a portion of the debt, the debt will be assumed to be valid.
  (e) A statement specifying that, if the consumer notifies the collection agency in writing within 30 days after receipt of this notice, that the debt, or any portion of the debt, is disputed, the collection agency shall obtain verification of the debt or a copy of a judgment against the consumer and that a copy of the verification or judgment shall be mailed to the consumer by the collection agency.
  (2) If the consumer notifies the collection agency in writing, within 30 days after receiving the written notice, that the debt, or any portion of the debt, is disputed, collection of the debt or any disputed portion of the debt shall cease until the collection agency obtains verification of the debt and a copy of the verification or judgment is mailed to the consumer by the collection agency. Verification of the debt or any disputed portion of the debt shall include the number and amount of previously made payments and the name and address of the orginal creditor, if different from the current creditor, or a copy of the judgment against the debtor.
  (3) The failure of a consumer to dispute the validity of a debt under this section shall not be construed as an admission of liability by the consumer.
 

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2 hours ago, BV80 said:

In terms of bankruptcy, medical debts might be classified as “business debts”, but the 6th Circuit’s ruling in Haddad v. Alexander, Zelmanski, Danner & Fioritto made no reference to that.  Perhaps it’s because of a requirement  in bk of “voluntarily incurred”?  The FDCPA makes no such distinction between voluntarily or involuntarily incurred.  

Interesting point.

However, for any kind of medical debt, one cannot assume a judge will call a medical debt a consumer debt for purposes of the FDCPA.  First, there is the precedence of many medical debts being considered business debts for BK purposes.  Second, as we have seen time and time again, judges often do whatever the he!! they want to do, often ignoring law or even Supreme Court decisions.  

I would agree that a vet debt SHOULD be considered a consumer debt.  I don't know of any case law that explicitly says it is consumer debt, so tread carefully.

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3 hours ago, Brotherskeeper said:

@BV80 FYI--Michigan law requires that verification includes the number and amount of previously made payments:

339.918 Communication with consumer; notice; effect of disputing validity of debt; verification of debt; failure to dispute validity of debt.
Sec. 918.

  (1) Within 5 days after the initial communication with a consumer in connection with a collection of a debt, a collection agency shall send the consumer, unless the following information is contained in the initial communication or the consumer has paid the debt, a written notice containing all of the following information:
  (a) The amount of the debt owed.
  (b) The date the communication was sent to the debtor.
  (c) The name of the creditor to whom the debt is owed.
  (d) A statement specifying that unless the consumer, within 30 days after receipt of this notice, disputes the validity of the debt, or a portion of the debt, the debt will be assumed to be valid.
  (e) A statement specifying that, if the consumer notifies the collection agency in writing within 30 days after receipt of this notice, that the debt, or any portion of the debt, is disputed, the collection agency shall obtain verification of the debt or a copy of a judgment against the consumer and that a copy of the verification or judgment shall be mailed to the consumer by the collection agency.
  (2) If the consumer notifies the collection agency in writing, within 30 days after receiving the written notice, that the debt, or any portion of the debt, is disputed, collection of the debt or any disputed portion of the debt shall cease until the collection agency obtains verification of the debt and a copy of the verification or judgment is mailed to the consumer by the collection agency. Verification of the debt or any disputed portion of the debt shall include the number and amount of previously made payments and the name and address of the orginal creditor, if different from the current creditor, or a copy of the judgment against the debtor.
  (3) The failure of a consumer to dispute the validity of a debt under this section shall not be construed as an admission of liability by the consumer.
 

 

Thank you to all of you whom have replied! Such incredible insight and case law. Based on what BrothersKeeper stated, am I correct then to assume that once I sent the certified debt validation request, the CA has 5 days to respond to me as it says in the #1 rule? Because if that is the case, 5 days has long passed as I sent the DV request on 6/1 and here we are 6/24 and no response....?

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56 minutes ago, Jinxo said:

I correct then to assume that once I sent the certified debt validation request, the CA has 5 days to respond to me as it says in the #1 rule?

No. It says, "(1) Within 5 days after the initial communication with a consumer in connection with a collection of a debt, a collection agency shall send the consumer, unless the following information is contained in the initial communication or the consumer has paid the debt, a written notice containing all of the following information: (a.) thru (e.)"  Number 1 requires them to send written information within 5 days after their initial communication with you, unless the information in (1.)(a. - e.) is in their first communication with you. You are required to send your dispute or request for verification of the debt in writing within 30 days of receipt of their written notice. "collection of the debt or any disputed portion of the debt shall cease until the collection agency obtains verification of the debt and a copy of the verification or judgment is mailed to the consumer by the collection agency.

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7 minutes ago, Brotherskeeper said:

No. It says, "(1) Within 5 days after the initial communication with a consumer in connection with a collection of a debt, a collection agency shall send the consumer, unless the following information is contained in the initial communication or the consumer has paid the debt, a written notice containing all of the following information: (a.) thru (e.)"  Number 1 requires them to send written information within 5 days after their initial communication with you, unless the information in (1.)(a. - e.) is in their first communication with you. You are required to send your dispute or request for verification of the debt in writing within 30 days of receipt of their written notice. "collection of the debt or any disputed portion of the debt shall cease until the collection agency obtains verification of the debt and a copy of the verification or judgment is mailed to the consumer by the collection agency.

Okay, but I'm now confused... Regarding their first communication, I am not entirely sure if it had a through e but I am confused about:

  (b) The date the communication was sent to the debtor.

What exactly is this referring to?

 

 

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21 minutes ago, Jinxo said:

Okay, but I'm now confused... Regarding their first communication, I am not entirely sure if it had a through e but I am confused about:

  (b) The date the communication was sent to the debtor.

What exactly is this referring to?

 

 

That is a bit confusing.  Perhaps “the communication” referred to in (b) is the initial communication.  If the initial communication did not contain the listed disclosures in (a) - (e), the next letter must contain the date the initial communication was sent.  In other words, “we’re now sending you these disclosures that were not included in our initial communication we sent to you on this particular date.”

Just an idea.  😀

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Basically, forget #1 unless they left out something that is required.

#1 is similar to the FDCPA.  For example, if the initial communication is a phone call, they MUST send a letter within 5 days.  That is both federal and Michigan law.  The Michigan law adds they must put in the date of the phone call.  

If the first communication is a letter, just make sure they have everything in #1 in their letter.  

As far as the SECOND communication, if they did NOT include anything in #2, they are in violation.  I have not seen their letter, but my impression is they did NOT include all the information required in #2.  

In which case, they are in violation of Michigan law.

The fact they are in violation of Michigan law may or may not be usable in negotiating a debt settlement with them.  Or, it could be a standalone state law suit whereby you sue them.  

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Strange update.... I called the Debt Collector company to negotiate. They DID acknowledge that the debt was now in disputed status because they received my letter a couple weeks ago. BUT they said that they are "no longer representing the debt and it was returned back to the hospital". They stated that I must now instead just contact the hospital which is so confusing. They also said that they did not report this debt to any of the credit agencies. So now I am very confused about WHY the debt collector would no longer represent the debt? I tried to get it out of them the reason for this, but the only "possible" explanation was that it was returned because of being in disputed status BUT that was not a solid answer and there was clearly more to it that they would not say...
The debt collection company made it clear that once the debt was disputed by me, that they cannot legally proceed with reporting the debt to any CRA.

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14 minutes ago, Jinxo said:

Strange update.... I called the Debt Collector company to negotiate. They DID acknowledge that the debt was now in disputed status because they received my letter a couple weeks ago. BUT they said that they are "no longer representing the debt and it was returned back to the hospital". They stated that I must now instead just contact the hospital which is so confusing. They also said that they did not report this debt to any of the credit agencies. So now I am very confused about WHY the debt collector would no longer represent the debt? I tried to get it out of them the reason for this, but the only "possible" explanation was that it was returned because of being in disputed status BUT that was not a solid answer and there was clearly more to it that they would not say...
The debt collection company made it clear that once the debt was disputed by me, that they cannot legally proceed with reporting the debt to any CRA.

They can't report it because they are no longer representing the animal hospital.  They could report a disputed debt under federal law, as long as it is marked disputed.  Not sure about Michigan law.  

What this means is the account has been sent back to the hospital.  I don't know why.  They won't tell you why, and you will probably never know.  It might be that this particular collection agency won't work with disputed debts.  Some do, others do not.  Generally, a collection agency gets a commission from whatever money they can collect.  If you are not going to pay anything, there is nothing to collect, so no commission.  Since the account is now a waste of time for them, they sent it back to the hospital.  

Take whatever disputes you have with the account to the hospital.  You won't have any dealing with the collection agency again, unless you decide to sue them.  

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1 hour ago, Jinxo said:

So now I am very confused about WHY the debt collector would no longer represent the debt?

There could be any number of reasons all which are not related to you personally.  They may only have a specified amount of time to get payment before it goes back to the vet.  They may no longer be covering the practice for any accounts which would mean they all go back.  It is possible the vet fired them because they didn't bring in any past due revenue.

56 minutes ago, BackFromTheDebt said:

I tried to get it out of them the reason for this, but the only "possible" explanation was that it was returned because of being in disputed status BUT that was not a solid answer and there was clearly more to it that they would not say...

Given that they were evasive I would be most concerned that the practice is getting ready to simply sue you.  The FDCPA does not apply to the practice so they are not bound by the validation issue and can simply file suit.

1 hour ago, Jinxo said:

The debt collection company made it clear that once the debt was disputed by me, that they cannot legally proceed with reporting the debt to any CRA.

Well, that isn't true but they don't need to know that!  If they still had the account they could report it but would have to state that the consumer disputes the debt.

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On 6/25/2020 at 4:02 PM, Clydesmom said:

Well, that isn't true but they don't need to know that!  If they still had the account they could report it but would have to state that the consumer disputes the debt.

Thank you for your responses. Regarding your last point, I just wanted to correct the record for anyone else that may stumble upon this thread... In Michigan, a collection agency CANNOT report the debt once it has been disputed in writing by the debtor. This is due to a michigan statute as mentioned above and the agency also confirmed it when I asked about that...

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55 minutes ago, Jinxo said:

In Michigan, a collection agency CANNOT report the debt once it has been disputed in writing by the debtor.

Which MI statute?

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16 hours ago, Jinxo said:

Thank you for your responses. Regarding your last point, I just wanted to correct the record for anyone else that may stumble upon this thread... In Michigan, a collection agency CANNOT report the debt once it has been disputed in writing by the debtor. This is due to a michigan statute as mentioned above and the agency also confirmed it when I asked about that...

The Michigan statute does not state a collection agency can't report a disputed debt. It states that a collection agency shall cease collection until verification is mailed to the consumer. Is a vet bill considered to be a medical debt? 

"(2) If the consumer notifies the collection agency in writing, within 30 days after receiving the written notice, that the debt, or any portion of the debt, is disputed, collection of the debt or any disputed portion of the debt shall cease until the collection agency obtains verification of the debt and a copy of the verification or judgment is mailed to the consumer by the collection agency. Verification of the debt or any disputed portion of the debt shall include the number and amount of previously made payments and the name and address of the orginal creditor, if different from the current creditor, or a copy of the judgment against the debtor."
 

"Medical Debts Are Given a Grace Period: The three credit bureaus now wait 180 days before listing medical debt on your credit reports. This grace period gives you time to figure out payment options before the debt affects your credit scores.

Medical Debts Are Removed Once Paid: While most collections remain on your credit report for seven years, medical debt is removed once it has been paid or is being paid by insurance. Unpaid medical debt in collections will still remain on your credit report for seven years from the original delinquency date."

https://www.experian.com/blogs/ask-experian/can-medical-bills-affect-credit-report/

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