we had a medical bill that was sent to collections...the credit bureau put a levy on my bank account...my insurance co paid the bill and we also went to court about the debt and the judge ordered that we be paid back...we got part of the money back and now the credit bureau has issued another levy on the same debt...what is going on?
To the best of my knowledge, consumer credit reporting agencies (commonly called "credit bureaus"), which include Experian, Equifax, and TransUnion, do not engage in the business of collecting debt. The consumer credit reporting agencies do collect data on consumers from creditors, then sell the financial life and habit information they gather to lenders, employers, landlords, insurance agents, cell phone providers, utilities, and consumers themselves.
Although you wrote "credit bureau," I believe that you may have meant "collection agent." A collection agent may work on behalf of the creditor, or may have purchased the debt from a creditor. How does this happen?
When a debtor stops paying on a debt and the number of days since the most recent payment reaches 120 days, the account is no longer considered current, and the creditor is required to "write-off" the debt. Writing-off a debt does not mean the debtor is no longer responsible for the debt, or that collection efforts cease.
At the write-off point, the creditor will transfer the debt to a late-accounts department, or has the option to sell the debt to a collection agent. This is sometimes called "sending a debt to collections." The collection agent will buy the debt at a discount. However, the collection agent has the right to collect the entire balance due plus interest.
A creditor -- a debt collector that owns a debt account is a creditor -- has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. A court (or in some states, a law firm for the plaintiff) is required to notify the debtor of the time and place of the hearing. This notice is called a "summons to appear." In the hearing, the judge will decide if the creditor should be allowed to collect the debt, and if the debtor fails to appear, the judge has no choice but to decide on behalf of the creditor. My guess is that you received a summons, failed to appear, and as a result the creditor received a default judgment.
A judgment is a declaration by a court that the creditor has the right to ask for a wage garnishment, a levy on the debtor's bank accounts, and a lien on the debtor's property. Which of these tools the creditor will use depends on the circumstances.
My guess is that after the collection agent received the default judgment the medical insurance company finally paid the claim. Unfortunately, it appears as though the insurance company paid the original creditor, which was the medical service provider. Again, my previous two sentences are speculation based on your very brief message.
If what I wrote above is accurate, there is now a dispute between the medical service provider and its collection agent. The collection agent, in frustration or ignorance, placed a levy on your bank account in an attempt to... well I don't know why it would do that. The collection agent has a cause of action to sue the medical service provider for breach of contract, and my guess is that by placing a levy on your bank acount that it is hoping that you or your attorney will kick up enough fuss to convince the provider to pay its collection agent.
Unfortunately, the collection agent's action may have created a large liability for itself. My suggestion is for you to consult with an attorney in your state to determine if you have a cause of action for malicious prosecution or abuse of process. Keep careful records of any harm this levy may have caused you, such as bank fees, overdraft penalties, attorney fees, and so on.
To learn more about a creditor's and debtor's rights, see Collections Advice.
I wish you the best of luck in resolving your financial difficulties, and hope that the information I have provided helps you Find. Learn. Save.