Can a hospital take you to collections even though you are sending money every month?

Question

I've always heard that as long as you pay something a month that they can not take you to collections for the bill, is this true? I'm paying on some large medical bills and have been sending $50 to $100 a month to pay them off, however they sent me a letter saying that if i don't pay it off in full that they will send the account into collections.

Also, if they do send me to collections, will that show up and effect my credit report? I've been told that medical isn't looked at, but i don't see why not?

Answer 1

As long as you owe, they can do that. Whether that would be their best strategy for collection is debatable. You might want to talk to someone at the hospital directly. Billing units often set up letters like that to go out automatically to delinquent accounts.  

Answer 2

Yes if the bill is sent to collections, it will show up on your credit report and lower your credit score.  It should remain on there for about seven years. Even if you pay it off a week after it ends up in collections.

If I were you, I would make copies of my income tax statements, a recent paycheck stub from every member in the family and be ready to talk to the financial people at the hospital.  If you are considered 'poor' you will likely be forgiven of the bills.  But only if they have the funds in their forgiveness account.  If they think you have enough money to pay the bill, then they will certainly make a payment plan that will work for you and keep your bill out of collections which will keep your credit in good standings.

Answer 3

This is a financial urban legend.  They can send you to a collections agency if you are behind on your payments.  If you are supposed to be paying them $150 and you are sending them $100 then you would be behind on your bills.  They can send you to collections.  There is nothing to prevent them from doing so.  They can also charge you fees for not paying all of your bill as well.

Answer 4

They can send any of their accounts to collection whenever they want, but it's expensive for them to do so.  If you're already paying as much as you can afford, and they know that, then it would not make sense for them to turn it over to collection.  The best the collection agency could do is collect the same amount from you each month ($50 - $100), then take out their sizable cut and forward the rest to the hospital, which would be less than what they're getting directly from you.

If they do turn it over to collection, yes this would show on your credit report.  I'm not aware of "medical" not being looked at.  It sounds to me like the hospital is using the threat of collection as a scare tactic to get you to pay faster, but as long as you're making progress payments, it's unlikely that they'll send you to collection.

Answer 5

They should not do that since you are paying on it.  Make sure your payments are being applied to your account.

Answer 6

It's an urban legend that as long as you make "good faith" payments, you can't be sent to collections or sued.  Hospitals typically only accept payment plans for 3 ot 6 months.  They don't want to carry accounts.  They don't have the personnel to manage accounts receivables from consumers.  It is more cost effective to assign or sell the debt to a collection agency.

You should have tried to make arrangements either before or at the time of your medical service for some kind of discount.  It's too late now.

The collection agency will report the debt to the credit bureaus and this will affect your credit.  The collection agency won't accept small payments over a long term.   You may be able to negotiate a smaller settlement, but they will want lump sum or not more than 6 month payment plan.

The collection agency may sue.  If you get a summons, show up in court.  The judge may give you a reasonable payment plan.  Even if they get a judgment, the max they can garnish from your wages is 25%.

Answer 7

No they can't.

Answer 8

Unfortunately, this is not true.....they are not obligated to accept any amount you offer as an acceptable payment...

Answer 9

If they are accepting the payment, they can't send it to collections. They have to refuse accepting the payment and when they do, then it will be sent to collections which almost never happens as long as youa re making monthly payments. Most of these letters are generated automatically by a script program and they are nothing but a scare tactic to have you pay in full ASAP. If the hospital is accepting your payments, it means the account is being taken care of and can't be sent to collections. There is no "minimum" on a hospital bill and what you are doing is making sure that you keep the account in positive standing every month. Did you agree with them on a $50 payment plan or something? If you did, they will call and harass you to change the term of agreement, Don't change the term of agreement you have under any conditions. You have a right of refusal to change the terms of agreement and still pay what you have been paying without it being going to collections.

It will hurt your FICO scores if it goes to collections and mortgage lenders sometime forgo medical bills as long as you have other accounts like credit cards which are reflected positively. But medical is another obligation which you should pay off. I know we should all have universal health coverage but that isn't a topic for this forum.

Answer 10

Yes, a hospital can send your account to a collections agency even if you're paying a small amount on it each month.

It makes economic sense for them to do so, in regards to P&L and taxes.

It will only show up on your credit report if they report it to the credit agencies.