Can I negotiate old hospital debts that have gone to collection?

Question

after years of irresponsibility I'm finally trying to get my credit straightened out. I have a few old medical bills that have been on there since 2002 and 2003. I still don't have a lot of money; is it possible to negotiate a settlement? How would you recommend I do this?

thanks!

Answer 1

Yes, Negotiate! When the collection agency calls, say to them, "Right now I'm broke but I'm willing to pay $$$ (whatever you can afford a month) and that you can send them a monthly payment. I'm sure they would accept that. Its better than nothing.  

Answer 2

Yes, even after it went to collections.  They are trying to get the most possible but would often settle for something if they thought there was a good chance of bankruptcy and thus getting a fraction if anything.  If you had not made any payments, they are more likely to accept a small reduction of no more than 50%.  If you had made payments, of say, $100 a month on a $70,000 bill, they will probably want to draw up a contract for more, like $150 or $200 a month.

I would draw up a realistic budget and figure out how much I can pay them a month, compute how many months that would be, then offer to present that to the collection agency along with a reduction so that it would take no more than 20 years to pay off the balance at that rate.  If they try to revise it and send it back, I would say I already budgeted for sacrifices and their budget is unrealistic meaning I would get behind on something, probably the payments to them, but I would be willing to try living on their budget as long as I would not be required to, in good conscience, provide any commitments to keeping such an unrealistic budget.

I would not threaten with bankruptcy unless I honestly felt like it was imminent.  However, if I was bankrupt by definition, which is owing more than I own in assets, I would begin the budget with a listing of my assets and debts which would show to them that I am basically bankrupt and they should better understand that I am trying to negotiate based on lack of ability to pay rather than lack of wanting to pay.  Most people fall into the category of a lack of wanting to pay after making commitments and getting all the medical care and stuff charged to their credit card and school loans.  They may, however, pay the car, utilities, and rent because those involve current benefits.  If I can distinguish myself from those and point out that I am sincere, somebody at the collections agency should recognize that and categorize part of my debt as not able to pay.