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Hospital Bills and Debt Help

I have a small hospital bill and it has now gone into collections. How can I get rid of this bill so my credit is not ruined?

I have a small hospital bill and it has now gone into collections and a judgment has been issued. How can I get rid of this bill so my credit is not ruined?

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Bill's Answer
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Updated: Oct 23, 2014

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Unfortunately, since a judgment has already been issued against you by your local court, there is no effective way to prevent the account from appearing on your credit report. Since judgments are a matter of public record, the credit bureaus will almost certainly know that a judgment has been issued against you and will report the information on your credit reports. The best way to mitigate the damage caused by this judgment would be to pay the debt off as soon as possible. Once the debt has been paid in full or settled, the creditor should file a satisfaction of judgment with the court. Soon thereafter, the credit bureaus should pick up the fact that the judgment has been satisfied; they should update your credit report accordingly and report the debt as having a $0 outstanding balance. To read more about credit reporting, I encourage you to visit the Bills.com Credit Report Resources page.

Although any judgment appearing on your credit report will have a negative impact on your credit rating, a satisfied judgment showing a $0 balance should cause significantly less damage to your credit score than an unpaid judgment. You may not need to pay the entire balance of the debt to resolve this judgment; if you can raise a significant portion of the balance, say 50% or more, the hospital may be willing to settle the debt, allowing you to pay a portion of the balance and forgiving the remaining debt. Even if you cannot raise enough to offer a reasonable settlement, you should contact the creditor to discuss how you can resolve this debt. The hospital may allow you to establish a repayment plan, allowing you to pay an affordable amount each month toward the outstanding balance. Once you the account is paid off, either through a settlement or a payment plan, the creditor should file a satisfaction of judgment with the court, which should appear on your credit report within a few months of the satisfaction being filed with the court. Regardless of how you are able to resolve this debt, you need to make sure that you obtain a written agreement from the creditor before making payment, as you need to have documentation of your agreement in case the creditor attempts to renege or change the terms after payment has already been made.

I encourage you to pay off this account as soon as possible to minimize the damage to your credit profile. In order to expedite the judgment being reported as "satisfied" to the credit bureaus, you can obtain a copy of the satisfaction of judgment from the creditor or the court and send a copy to the credit bureaus along with a letter requesting that the status of the account and judgment be updated on your credit reports. You can contact the three major U.S. credit bureaus--Equifax, Experian, and TransUnion--by visiting AnnualCreditReport.com. AnnualCreditReport will also allow you to obtain a free copy of your credit report from each of the credit bureaus once every twelve months. I encourage you to regularly review your credit reports to make sure that all information being reported is accurate and up to date.

See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.

To learn more about credit, credit reports, and credit ratings, I encourage you to visit the Bills.com Credit Help page.

I wish you the best of luck in resolving this judgment, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

24 Comments

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  • LH
    Oct, 2011
    landy
    How can deal with the hospital? i have a collection account from 6years ago and i having made paids every month, they told me i have to pay 150 dollars a month but that is too much so I'm making payments for 50 dollars, now i got a letter and they stated they will send my account to garnishment because i'm behing on my balance, they said I have to pay 1050 dollars in two weeks to avoid the garnishment, what can i do??? I try to made an agreetment but they refused it. thanks
    0 Votes

    • BA
      Oct, 2011
      Bill
      See the following Bills.com resources to understand more about your two issues — how to negotiate the medical debt and why a creditor does not have to accept the payment you offer:

      Please ask any follow-up questions you may have here or on the appropriate page.

      0 Votes

  • EE
    Jan, 2011
    Evette
    I live in alabama. I have been hit with the 25% garnishment of my pay check. I am not going to be able to afford what they want me to pay. What can I do to get the payment lowered. I don't want to file bankruptcy but I will if I cant find anyone to help me soon! Do you think you can help with some good words to help me....pls advise.....
    0 Votes

    • BA
      Jan, 2011
      Bill
      Once you have let things degenerate to the point where your wages are being levied, you have few options. Prior to the garnishment, you may have been able to negotiate a long term payment plan with a monthly payment that you could afford. Now, the creditor has no incentive to be flexible with you, as the levy order makes it so that you pay them each paycheck. I can understand your reluctance to file for bankruptcy, but it seems to be the only route to stop the levy, unless you can prove that you don't owe the debt.
      0 Votes

    • LS
      Apr, 2011
      Lashay
      Can a debt collection agency still take you to court if you start to make payments monthly. Also is it legal for them to go into your checking account to take payments any time they want? Thanks
      0 Votes

    • BA
      Apr, 2011
      Bill
      Regarding your first question, do you have a settlement agreement with the collection agent that you will pay $X for Y months to resolve the debt? If yes, and if you are paying $X regularly and on time, then the collection agent is breaking its contract with you by filing a lawsuit. If you do not have a contract to resolve the debt, and are sending the collection agent whatever you want whenever you want, then the collection agent may file a lawsuit against you.

      No one can remove funds from your bank or credit union account without a) your approval, or b) a court order (in other words, a judgment).
      0 Votes

  • AL
    Jan, 2011
    Amanda
    I have a collection agency threatening to garnish my wages because of an unpaid medical debt. It's pretty funny because I am unemployed which is why I couldn't pay the medical bills in the first place. I tried sending in financial aid forms to the hospital two times, and never received a response. I went in to the hospital and spoke with a financial adviser there and she said that they had never received the financial aid applications and that it had already gone to collections so I would just have to pay it. Like I said before I'm unemployed and there is no way I can pay the 13,000 dollar bill........ advice?
    0 Votes

    • BA
      Jan, 2011
      Bill
      You have a few options to consider. You can try negotiating directly with the collection agency. See if you can get them to agree to a settlement. If possible, see if they will settle for a reduced amount that you pay off in monthly payments. You may be eligible for a Chapter 7 bankruptcy that would discharge your legal responsibility to repay the debt. Even if you don't want to file for bankruptcy, it makes good sense to speak to a bankruptcy attorney to see if you would qualify for a Chapter 7 bankruptcy. If you do, it improves your negotiating position with the debt collector, who would get nothing were you to successfully file for bankruptcy. If you feel that you can't negotiate effectively on your own behalf, you should speak with a debt settlement company about hiring them to negotiate a settlement on your behalf. You can get a free quote from one of Bills.com's approved debt relief providers. Lastly, you did not mention how long it has been since you incurred the debt or made any payment on it. Look at your state's laws for the statute of limitations for debt collection. Speak with an attorney in your area, if you are near or passed the time that the statue of limitations on your debt.
      0 Votes

  • BA
    Aug, 2010
    Bill
    I am not aware of any Virginia law that prohibits the charging of interest on medical debt. (Readers, please correct me below.) If you are dealing with a collection agent, then it purchased your collection account for pennies on the dollar, although it has the right to collect the original balance plus allowable interest. Therefore, you have some room for negotiating a lump-sum settlement with the collection agent. Start at 10 cents on the dollar and work up from there.
    0 Votes

  • PD
    Aug, 2010
    Patricia
    I have a medical bill from 5 years ago that I tried to pay. It had been sent to a collection agency. I am a resident of Va. and have been for many years. I was in Ak. as a visitor at the time I needed the hospital. The bill is for 998.00 and they want 1950.00. They have charged intereest and want the full amount although I tried to negotiate for what was originally owed.How can they charge interest on a medical bill on someone from the state of Va.?
    0 Votes