Archive for the ‘Medical Debt’ Category

Is the worst that can happen being thrown in jail for an unpaid medical debt?

Friday, July 5th, 2013

Question: I had to go to the community hospital, as I was really sick and thought I was going to die. I applied for county indigent assistance on my bill and thought that they would take care of it, as I was unemployed. Then I received debt collection calls demanding that I had to pay more than the original bill. I could not pay it, but now I have been sued and they want to also be paid interest and the court costs. What is the worst? Is jail time possible, if I cannot pay?

My Response:

The question of debtors prison and county jail should be the furthest thing from your mind on an unpaid personal debt. When the Constitution was written and ratified by the states, it allowed Congress to provide a safety valve of filing for bankruptcy, as a last resort to discharge most debts for those who qualify. (Article 1, Section 8, Clause 4.) In 1833, federal law eliminated prison for private debts and the states followed. Now, it would be amazing to find an instance where a person is jailed in any state, simply for not being able to pay their personal debts.

Nevertheless, fear of debtor’s prisons are stoked regularly by the news media, even CBS news uses provocative headlines to catch more readers. As recently as 2012, CBS ran a report with the headline: “Jailed for $280: The return of debtors’ prisons.” In fact, the report had nothing to do with the headline. Someone reading the headline would probably believe that not paying a $280 bill or credit card may result in a jail sentence.

Upon reading the entire 2012 CBS News Report, however, it is clear that there is no return of debtors prisons in the USA. The people who were threatened with or spent time in jail were there because they failed to appear in court when ordered, for criminal acts, or they failed to pay court-imposed fines associated with criminal convictions. The other issue in the CBS report was that several states allowed collection charges to be added on top of already expensive court fines.

A judgment is not inevitable if a debt collection lawsuit is filed against an individual, particularly if defended by an experienced debt collection defense attorney, who will handle the case to get it resolved before trial, either by settlement or dismissal. Moreover, even if a money judgment is entered by the court against a person, there are numerous ways to get that judgment resolved and NO chance of jail time, provided that, when so order, the debtor appears in court, answers questions truthfully, and does not commit any criminal acts that are punishable with jail time.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler
Facebook: www.facebook.com/SoCalConsumerLawyer

Calls for an Unpaid Medical Debt by CMRE, but Physician’s Office Said No Outstanding Bills

Thursday, February 14th, 2013

Question: I started receiving calls on an unpaid medical debt. The caller ID shows CMRE, which I found online as a debt collection agency in California that collects medical bills for hospitals and physicians. I did not receive anything in writing from them and when I get one of these calls, they immediately ask for my SSN, then hang up when I refused. I have now learned that CMRE shows on my credit report for a few hundred dollars. What can I do to get the calls to stop and the item off my credit, as I have perfect credit? Can I ever get my good credit restored?

My response:
CMRE is a large debt collection agency that collects unpaid medical bills, either because the bill was not covered by the patient’s insurance, the unpaid insurance co-pay, or the patient had no insurance coverage and did not qualify for indigent care. I have dealt with this debt collection agency’s collection efforts against my clients and sometimes had to defend my clients in court from a debt collection lawsuit filed by CMRE’s attorneys.

As a consumer, never reveal your SSN, DOB, or DLN to anyone who calls you, not even to your own bank or broker, because there is too much identity theft and you don’t want to add yourself as another victim of a phone scam. Caller ID’s are convenient, but they do not guarantee the identity of the caller, because identity thieves and other hackers know how to spoof a caller ID. Even hackers may use a caller ID of the police, sheriff, IRS or FBI. The agencies will not call you and ask for your SSN or other information. If you are called and asked to give out your personal numbers, you should check independently that this is a representative of the company that you are doing business with, such as by hanging up, then calling their legitimate number and getting to the extension of the representative.

Start by sending a letter by U.S. Certified Mail to both the physician’s office and CMRE, which address should appear on your credit report. Your letter should be in the form of my free sample letter #1.1, Notice of Dispute and Request for Verification, which I’d send to the debt collection agency. The CMRE letter should state that you never received anything in writing from them.

Your Certified letter to the physician’s office should confirm the conversation that you had with the office manager or billing assistant that they saw no outstanding bills under your name and add a sentence asking that they send you a copy of the bill that they assigned to CMRE. Also, ask them why the bill was not submitted to your insurance company or what the status of the insurance payment is. Be sure to keep a photocopy of the signed letters.

Your dispute letters serve several purposes, including forcing CMRE to indicate the account is disputed with the credit reporting agencies, which should exclude the account from affecting your credit scores. If CMRE does not verify the debt in writing, then they should also stop reporting the account to the credit reporting agencies, or be at risk for violating your rights as a consumer under the Fair Debt Collection Practices Act (FDCPA). Such violations can result in damages and your attorney’s fees being awarded, if you prevail in court.

Your letters also make it clear that their failure to send you the letter required by law does not mean that you will wait for it to arrive some day and not proactively document the situation to protect your rights. In my years of dealing with debt collection agencies, if they fail to provide you with documentation promptly, either they are trying to get you to pay money on an account where there is a problem or their records are so badly screwed up that you will not know if they do anything correctly. Either way, the consumer should not tolerate their credit being harmed and annoying phone calls. Putting your position in writing, with the use of my sample letters, will let you sleep better now that you have firmly put the burden on them to respond in writing and provide you with written documentation.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer