Jump to content

Sign in to follow this  
carsearch1982

Huge medical debt question $100,000 (1st time poster)

Recommended Posts

I will make the question short and to the point as I can. Hoping to get some good advice.

I acquired roughly $100,000 medical debt a little over a year ago ( 2 week stay in hospital almost died) insurance ended up sending me a check (long story) instead of sending it to the hospital. Fast forward down the road apparently my medical debt got charged off and sold to a credit collection company.

My options are

*Pay the bill $100,000 and be broke and barely able to survive

*wait to get contacted by the debt collection agency and if they wont settle for a heavily discounted (70% or more) lump sum, I'm debating about not paying and letting it be in collections until statute of limitations run out.

 

Also I needed to add that it wasn't 1 check that was sent to me for the total amount it was a multiple of checks different amounts throughout about 6 months of time. As well as I was supposed to get a lump sum payment for an additional insurance coverage package that would be paid out to me if I was hit with a freak illness, which they never ended up paying out. As well as for almost 9 + months when I would call the hospital to check out what the total bill I owed they didn't have a record for it and it didn't show up in there system until may of 2018 ( I was in the hospital in feb of 2017) So it isnt as simple as I just received 1 check and was suppose to pay it that day to the hospital. It became a very unclear and weird situation of what monies was owed to me, confusion on how much the total bill was, as well as them having no record of a bill til much later.

 

Please advise me what you would do in my situation.

P.s my credit is already shot (younger years) and I own no property.

 

Thanks in advance.

Share this post


Link to post
Share on other sites

I am no expert on medical, but something about this sounds slightly illegal. If the insurance company was supposed to pay the provider but gave you the money instead and you are spending it, it sounds like some sort of theft situation on your part.

Share this post


Link to post
Share on other sites

It is likely illegal what you did keeping the money.

 

Odds are that it won’t become a criminal issue. 

 

I would not contact the hospital any longer because they are the party that might have a criminal issue with you.

 

if it has been sold to a 3rd party and that entity is trying to collect, you can fight them. They cannot file any criminal complaint.

 

just tell them to cease contacting you per the FDCPA. Send it in writing.

 

 

Share this post


Link to post
Share on other sites

First- get a lawyer;

Did you have a lawyer representing you in whatever settlement agreement you made with the insurance Co.?? If so, contact them and ask them to reopen the case, if not- get someone to reopen the case and get you whatever $$ are due you. ( I hope you didn't sign off on any settlement agreement)

Second - put whatever $$you have into a joint bank account with someone you trust (not with your spouse) in a different bank with the other person's name and SS# as primary.

You will likely be sued

Next; opt out and get your current reports.

https://whychat.me/GUIDEBOOK.html

 

DO NOT send a "no contact" letter to the CA. Send them this instead:

https://whychat.me/ltrcavalhipaa.html

 

This contains a "do not call" prohibition but NOT a total cease and desist. If you send them a total cease and desist it will certainly trigger a lawsuit.

 

DO NOT SIGN ANY CORRESPONDENCE TO A CA- THIS WOULD GIVE THEM AUTHORIZATION UNDER THE HIPAA PRIVACY RULES-- SOMETHING THAT THEY PROBABLY DO NOT NOW HAVE.

 

Ask the mods to move this to the medical debt forum

Share this post


Link to post
Share on other sites

Thank you guys so much for answering all this. It was a weird situation I was in the hospital for 2 weeks, and then recovering for another 3 months out. I paid off the first hospital (which most of the money got spent out of the 100,000 of total money sent to me from insurance company  and now have about 70,000 of it in a bank account been in there for about a year now untouched. I never signed anything with insurance company besides the back of the checks when i deposited them into the account. Which probably was about a good 10 or so checks. They didn't just send 1 big check at the end they were writing checks throughout the process of me leaving the hospital and still getting more hospital services. 

 

My question now is debt collection agency I havent spoke to or given them any info and neither will I tell them anything. But now my question is what do I do with the money thats sitting in the bank account that came from insurance company? How does it work with the IRS and being taxed or not?

Share this post


Link to post
Share on other sites

I had a 40k medical bill over 10 years ago. After I got out of the hospital they (the hospital) called a few weeks later about the bill and offered about a 40% discount if I paid it immediately. I was prepared to pay the whole thing but they just started off with the discount offer. So I paid that and was done. Nothing ever on my credit reports.

 

After researching it later, turns out medical insurance by agreement with providers only pays a fraction of the full "retail" bill. Those are inflated because they expect a very large percentage of people that get them will never pay since they have no insurance. The few that do pay inflated amounts which helps make up for the loss the hospital would otherwise have. So the whole thing is a game of sorts.

 

When I was in the hospital the financial peeps would come around every day asking questions in the apparent effort to find someone/something that would cover the expenses. I told them I'd just write a check and please leave. They didn't appear to believe me. I later learned that they had pulled my credit which, at the time, would have been completely consistent with that of a homeless person. Zero accounts and a smattering of negatives. So perhaps that's why they started off with a big discount. Probably could have gotten more off if I'd countered but I had no idea what the game was back then,

 

But there's Good News:

As for the IRS, there is no tax issue because that only applies to imputed income. Canceled medical debt is not imputed income.

 

https://www.forbes.com/sites/anthonynitti/2016/06/06/john-oliver-buys-and-forgives-15-million-in-medical-debt-but-is-the-forgiveness-taxable/?ss=taxes#11a38d6cb4f0

 

Edited by cashnocredit

Share this post


Link to post
Share on other sites

Don't worry about taxes. Insurance proceeds are not taxable ( even if you "converted" them). The interest these $$ are earning ARE taxable.

HOWEVER the $$ sitting in your bank account can and WILL be attached if you are sued. Get them out of your name.

Edited by Why Chat

Share this post


Link to post
Share on other sites

Ok I will have to look into someone that I trust to put that money in their name. Not sure who. But what would happen if I invested the money in a 401k or a ira account or something similar? Would down the road they be able to take that money?

Share this post


Link to post
Share on other sites

CAVEAT: This is how ***I*** would handle the matter.  I generally go outside of the box when I have assisted others but I also typically get the result I want and in a prompt manner that benefits all parties concerned...

 

First and foremost, there is no criminal issue that the hospital could press through the District Attorney on the checks if their name was not ON the checks.  Common sense would have suggested that the intent was for you to be making payment TO the various providers.  Obviously billing is not just under one umbrella but rather each individual practice for professionals providing services (which quickly add up given that the people drawing blood are an entity as would be various anesthesiologists, each doctor is often a separate outfit as would be any radiologists, etc...

 

That being said, being on the phone will not be productive.  Take the time to go through each and every statement and/or explanation of benefits.  Make a list of each entity to whom services were billed.  Given that most will be local, I would take the day to go to each of them IN PERSON.  You are less likely to get passed around or message-slipped.  You are ALSO more apt to get an agreement on what is to be paid and then you pay it ON THE SPOT. 

 

By making payments TO THE VARIOUS ENTITIES, there is no taxable event for the funds you received.  It was not income.  Granted, you should have made the payments far sooner, but by taking funds provided by insurance and routing it where it needs to go, you have basically derived no benefit.  With the 401K reference, you WILL have a taxable event if you have to sell the assets in order to recoup the funds.   

 

Standard caveat applies here that this is not legal guidance, you are not my client and I am not your attorney nor should any of this be construed as tax advice as taxing regulations can vary widely from jurisdiction to jurisdiction.  Consult your own CPA if you have specific concerns about the tax implications for having held the funds, even in a non-interest bearing account, for any period of time.

Edited by centex

Share this post


Link to post
Share on other sites
1 hour ago, centex said:

First and foremost, there is no criminal issue that the hospital could press through the District Attorney on the checks if their name was not ON the checks.

Actually the insurance carrier (there is only one that sends the check for the provider to the patient to hand over) is listed on the check.  The contract with the carrier by the covered person states that they will be mailed the check and are required to pay the providers.  While the hospital cannot press charges themselves they can ask the state to pursue theft by conversion.  At the very least you have breach of contract and potentially fraud. 

You cannot possibly believe that someone is mailed checks worth six figures and is legally entitled to not only keep the money for themselves but not pay the bills?

 

1 hour ago, centex said:

You are ALSO more apt to get an agreement on what is to be paid and then you pay it ON THE SPOT.

 He doesn't want to pay it.  He wants clean credit AND to keep the money.  

Share this post


Link to post
Share on other sites

 At the very least you have breach of contract and potentially fraud. 

 

That's what I was thinking when I called this slightly illegal. There are two kinds of illegal......criminal and civil. I doubt criminal would apply here, since they sent the money on their own dime. It's going to be up to a judge or jury to decide what should have been done with it. Hiding 40K of somebody else's money isn't going to make you look good in court. In fact, people who do that and refuse to tell the court what they did with the $$$$ usually get to sit in a jail cell until they change their mind.

Share this post


Link to post
Share on other sites
On 11/24/2018 at 10:07 AM, CreditSucksNot said:

Actually the insurance carrier (there is only one that sends the check for the provider to the patient to hand over) is listed on the check.  The contract with the carrier by the covered person states that they will be mailed the check and are required to pay the providers.  While the hospital cannot press charges themselves they can ask the state to pursue theft by conversion.  At the very least you have breach of contract and potentially fraud. 

You cannot possibly believe that someone is mailed checks worth six figures and is legally entitled to not only keep the money for themselves but not pay the bills?

 

 He doesn't want to pay it.  He wants clean credit AND to keep the money.  

This is NOT TRUE. I would of loved to  of paid the money all that I offered the hospital months ago. ($70,000+ arrangements to pay the remaining)

 

I do NOT WANT TO KEEP THE MONEY AND HAVE GOOD CREDIT. 

 

I'm simply weighing out the options of.

 

1) If I pay the 3rd party debt collection agency all the money I will still have bad credit since they wouldn't be able to fix the credit for me.

 

2) If I'm going to have bad credit and not have this incident taken off my credit how does me paying the 3rd party debt collection agency  even help me? All it does is gives the 3rd party debt collector money (not even the hospital) and leaves me with bad credit.

 

3) If I'm going to have bad credit and not have this incident taken off my credit how does paying the money back vs not paying the money back even do anything at all besides benefit the debt collection agency?

 

Correct me if I'm wrong but paying the debt collection agency only leaves me  A) still with this reported on credit report and b) $70,000+ dollars less then what I have in the bank now. If thats the case I don't see how paying the $70,000 does anything to help me LET ALONE does anything at all differently besides just shifting the money from my account to the debt collection agency's account. 

 

Am I missing something here?

 

Share this post


Link to post
Share on other sites

Yeah.  Don't pay the debt collection agency.  Pay the providers directly.   

 

Moving this to the medical forum.

Share this post


Link to post
Share on other sites
18 minutes ago, Pam said:

Yeah.  Don't pay the debt collection agency.  Pay the providers directly.   

 

Moving this to the medical forum.

Only problem with this, is if I pay the hospital how will I not be double billed and still owe the collection agency thats coming after me for this debt? That's the 1 thing I need to clear up.

Share this post


Link to post
Share on other sites

A 401K is not that simple to set up. As I said before-- GET A LAWYER!!

 

Paying a CA will not help you. Even if you made a "settlement" with them you would still owe the balance to whatever CA they transferred the balance to. Plus you will have signed an agreement that would become a new contract and would re-age the account. NEVER NEVER NEVER trust a CA they all lie like a rug.

 

IF you can make arrangements with the hospital to pay an agreed upon discounted amount. Get it in writing and reviewed by a lawyer. You can not "owe" $$ to a CA if you have paid the hospital as the account is only as collectible as legally valid. 

Edited by Why Chat

Share this post


Link to post
Share on other sites

I'm so confused. I don't understand what the point of me paying off the credit agency is GOING TO DO FOR ME? 

 

1) It's not going to help my credit, it's not going to get the hospital any money. All it's going to do is make the credit agency money and THAT'S IT.

 

Am I wrong here in that statement? You can say its morally un-ethical or whatever. 

 

option 1

pay credit agency money = hospital still doesn't get a dime out of that money only the credit agency does + my credit stays affected.

 

option 2

dont pay credit agency money= hospital doesn't get a dime + credit agency doesnt get a dime + my credit stays affected and damaged. The only difference in this situation is that I would have the money instead of the credit agency having the money. So I'm very confused as to why option 1 is better than option 2?

Share this post


Link to post
Share on other sites
8 hours ago, carsearch1982 said:

I'm so confused. I don't understand what the point of me paying off the credit agency is GOING TO DO FOR ME? The only advice you would get to pay a CA would be coming from a CA TROLL. NEVER NEVER NEVER pay a CA a RED CENT

 

1) It's not going to help my credit, it's not going to get the hospital any money. All it's going to do is make the credit agency money and THAT'S IT.

 

Am I wrong here in that statement? You can say its morally un-ethical or whatever. 

 

option 1

pay credit agency money = hospital still doesn't get a dime out of that money only the credit agency does + my credit stays affected.

 

option 2

dont pay credit agency money= hospital doesn't get a dime + credit agency doesnt get a dime + my credit stays affected and damaged. The only difference in this situation is that I would have the money instead of the credit agency having the money. So I'm very confused as to why option 1 is better than option 2?

There is NO "option 1" in any valid advice from this forum.

Option 2 is (IMO) the best way to go IF you protect your attachable assets in case you are sued.

As to your being charged with any crime for converting the payments from the insurance to your own use-- as I said before-- get a lawyer. I doubt VERY MUCH that this would happen as #1 the "conversion" took place well over the time limit for any such action( 1 year in most States)-- SEE A LAWYER. Your credit can be fixed without your repaying the $$. The ONLY thing you need to worry about is being sued and having your bank accounts garnished. Once you have gone beyond 4 years from the date of the medical services that engendered all this mess, you will be beyond the legal SOL for being sued.  

There is no "moral" or "ethical" equation involved here. Your insurance Co delayed payments as long as they could, your hospital overcharged you. You are a victim of the messed up health care system in this Country.

Edited by Why Chat

Share this post


Link to post
Share on other sites

SO howcome everyone here is making it sound like I should pay the credit agency and making me out to be the devil himself for not paying credit agency? They are basically saying because I owe the money pay the credit agency "because its the right thing to do" despite the fact it wont help me out in any situation in the matter?

Share this post


Link to post
Share on other sites
16 minutes ago, carsearch1982 said:

SO howcome everyone here is making it sound like I should pay the credit agency and making me out to be the devil himself for not paying credit agency? They are basically saying because I owe the money pay the credit agency "because its the right thing to do" despite the fact it wont help me out in any situation in the matter?

NO ONE( other than 1 fairly new poster-200 posts) is telling you to pay the CA. Look at the amount of posts that anyone has before you consider the validity of their advice.

 

If you want to be so easily swayed by ONE poster-- you are going to have a lot more trouble figuring out what to do. 

Edited by Why Chat

Share this post


Link to post
Share on other sites

Sorry I was wrong. I had 2 different threads ( on another board) I made them the same time and I responded to this one thinking it was the other board. My fault haha I should double check the board before commenting next time.

Share this post


Link to post
Share on other sites
15 hours ago, carsearch1982 said:

Only problem with this, is if I pay the hospital how will I not be double billed and still owe the collection agency thats coming after me for this debt? That's the 1 thing I need to clear up.

You WON'T be 'double-billed' because the third-party does not own your paper.  Further, even if they HAD bought the paper, you would be able very easily to show that the real party in interest had already been paid.  The common practice in medical billing is to farm the paper out almost immediately.  Very few practices actually SELL the paper. 

 

When you have a receipt showing that you PAID the bill to the provider, the matter goes away. 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Today's Birthdays

    No users celebrating today.
  • Member Statistics

    • Total Members
      175,283
    • Most Online
      1,528

    Newest Member
    ParisBplaychic
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×

Important Information

Guidelines