If I settle, will the collection be removed from my credit report?

[zebo]

Can't seem to find a definitive answer on this. Currently have a $900 medical bill in collection with UCB and reported to Transunion and Experian. The service was in Spring of 2021.  If I settle this with UCB for a lesser amount, will it be removed from my credit report?

[MarvBear]

Not trying to answer on behalf of Why Chat, but from my prospective if you were to work out a settlement agreement with the collection agency and manage to conform it is likely the account will be marked with a commentary line like "Account settled for less than full amount".  

[Why Chat]

What Marv Bear said is true plus the settled for less account will be NEWER  thereby reducing your credit score rather than helping it.

 

It is more than likely that this account can be removed from the 2 CRAs without any payment (other than postage)

 

Follow the guides;

https://whychat.me/GUIDEBOOK.html

https://whychat.me/GUIDE HIPAA PROGRAM.html

After opting out and deleting old addresses (as much as possible) you start by sending TU and Ex this;

https://whychat.me/hipaadisp.html

 

Once you have a response to this dispute letter come back to THIS POST for further assistance (if they were not deleted)

[zebo]

I mistyped the date in OP. Services were actually late March of 2022. Seems kind of quick to already be in collection. It originally showed up on my credit report in late August. I thought that a collection agency was supposed to give you a year before reporting to CRA. Does this mean that OC sent this to CA after less than six months?  

[Why Chat]

Follow the guides;

https://whychat.me/GUIDEBOOK.html

https://whychat.me/GUIDE HIPAA PROGRAM.html

 

Send TU and Ex this

https://whychat.me/hipaadisp.html

 

It is more than likely it will be deleted, if it is not then come back to this post for further instructions.

 

It is VERY unlikely the OC "sent" this to the CA, they likely picked it up from a "data dump" by the OC or from a data miner,(that is the reason to opt out)

If you were insured at the time of medical service (whenever it was) get your EOMB (explanation of medical benefits) from your insurance Co.

[zebo]

I sent the HIPAA dispute letter to TU and Experian about a month ago. I've received a response from TU and from UCB. Nothing back from Experian yet, even though tracking shows the letter was delivered on September 1st. Ran my Experian report today and the collection is still there. 

 

TU's response was: Investigation Results - Verified as Accurate. They just list the hospital and balance.

UCB's letter is as follows:

 

Regarding Creditor:  xxxxx  xxxxx Medical Center

UCB Reference number: 7xxxxxxxx

Account Balance: $900

 

To Whom it may concern,

 

Please review the enclosed information that you requested regarding the above mentioned account. If you have any questions regarding this information, call our office at the telephone number above. 

 

With this letter, they included a Medical Center statement, dated 09/06/23. It has an account number. It also lists several transactions from March 2022 along with their procedure codes and charges. It lists my insurance at the bottom, with 0 credits (I have a very high deductible). It also shows a total due of $900.

 

I really am not sure how this works, but it sounds to me that since this hospital statement was generated after the collection showed up on my credit report, that the hospital still owns the debt.  Can I possibly still negotiate with the hospital?

 

[Why Chat]

If you can pay the OC hospital directly the $900 do so with this letter.

https://whychat.me/hipltr.html

 

Insert A

 

If you had provided the correct date of service in the first place we could have both saved a lot of time and postage

DO NOT TRY TO PAY LESS THAN THE AMOUNT OWED OR YOU WILL FIND YOURSELF WITH A NEW COLLECTION AMOUNT ON YOUR REPORTS

[zebo]

1 hour ago, Why Chat said:

DO NOT TRY TO PAY LESS THAN THE AMOUNT OWED OR YOU WILL FIND YOURSELF WITH A NEW COLLECTION AMOUNT ON YOUR REPORTS

So if I paid $410 to the original creditor and resulted in a balance of $490, it would still show up as a collection on my credit reports?

[MarvBear]

Probably an additional collection account with perhaps another company for the difference.  

[zebo]

42 minutes ago, MarvBear said:

Probably an additional collection account with perhaps another company for the difference.  

I was under the impression that no medical collections under $500 would be reported by CRAs?

Edited September 28, 2023 by zebo

[Why Chat]

If you try to pay the OC less than the amount owed they will simply return the check to you and report your action to the CA

[zebo]

Do you think there is any chance that I can just call the OC and they will still accept payment via credit card at this point?

 

If not, is there really any advantage to doing the whole letter/cashiers check to the OC vs just paying the CA? The collection gets removed from my credit report either way, right?

Edited September 28, 2023 by zebo

[Why Chat]

Do what you want. 

We give the best advice we have if you believe that we spent years of research and hours of designing the HIPAA letter program because it is so easy to just pay whomever and get the account deleted then I hope you are not in a profession that requires following instructions

[zebo]

On 9/29/2023 at 4:35 PM, Why Chat said:

Do what you want. 

We give the best advice we have if you believe that we spent years of research and hours of designing the HIPAA letter program because it is so easy to just pay whomever and get the account deleted then I hope you are not in a profession that requires following instructions

Seems the HIPAA letter program was designed prior to the new reporting rules were implemented.  I would actually prefer to pay the original creditor; however, I've seen where at least one individual has lost their money by attempting your program and not having the funds credited against their debt. Following the program once the debt has been validated seems like an unnecessary risk, not to mention the extra work and expense. 

[Why Chat]

I don't know where you are getting your information from. The new reporting rules do not affect the way in which a paid collection is reported. If you pay the whole amount to the OC or the CA it will be reported as a paid collection, which will HURT your credit rather than help it as it will be newer.

[zebo]

According to Equifax:  Effective July 1, 2022, paid medical collection debt is no longer included on U.S. consumer credit reports. 

 

https://www.equifax.com/personal/education/credit/score/articles/-/learn/can-medical-debt-impact-credit-scores/

[Bluesie58]

12 hours ago, zebo said:

According to Equifax:  Effective July 1, 2022, paid medical collection debt is no longer included on U.S. consumer credit reports. 

 

https://www.equifax.com/personal/education/credit/score/articles/-/learn/can-medical-debt-impact-credit-scores/

Here it is also from the Consumer Financial Protection Bureau.

 

https://www.consumerfinance.gov/about-us/blog/medical-debt-anything-already-paid-or-under-500-should-no-longer-be-on-your-credit-report/

[Why Chat]

You may be right-- go ahead and do what you want to-- please let us know how it turns out for you.

[zebo]

 

Quote

 

Do what you want. 

We give the best advice we have if you believe that we spent years of research and hours of designing the HIPAA letter program because it is so easy to just pay whomever and get the account deleted then I hope you are not in a profession that requires following instructions

 

 

So it turns out that I received a lot of really bad advice in this thread. I guess the advice, was worth what I paid for it, 

 

Better informed sources indicated that settled medical debt is not reported by CRA's. So I called UCB and they offered a settlement for less than the amount owed. They also indicated that a settled medical debt will not appear on my credit report. I accepted their offer. Within a week the collection had been removed from my reports altogether and as a result my credit score has increased significantly.

 

To summarize: Yes, you can settle a medical debt with a collection agency and the collection record will be removed from your credit report. 

[MarvBear]

2 hours ago, zebo said:

 

 

So it turns out that I received a lot of really bad advice in this thread. I guess the advice, was worth what I paid for it, 

 

Better informed sources indicated that settled medical debt is not reported by CRA's. So I called UCB and they offered a settlement for less than the amount owed. They also indicated that a settled medical debt will not appear on my credit report. I accepted their offer. Within a week the collection had been removed from my reports altogether and as a result my credit score has increased significantly.

 

To summarize: Yes, you can settle a medical debt with a collection agency and the collection record will be removed from your credit report. 

 

Nice blanket statement!  We are glad it worked out in your favor.  However, the blanket statement I highlighted in red I do not believe it to be true in all cases, especially in those cases where the settled balance is in excess of $500.00.  Contratulations on your good luck.

[zebo]

49 minutes ago, MarvBear said:

 

Nice blanket statement!  We are glad it worked out in your favor.  However, the blanket statement I highlighted in red I do not believe it to be true in all cases, especially in those cases where the settled balance is in excess of $500.00.  Contratulations on your good luck.

 

Don't think this was really luck. And you're again giving misinformation as "the blanket statement" appears to be fact. My settled balance was in excess of $500.  Effective July 1, 2022, paid medical collection debt is no longer included on U.S. consumer credit reports.  The big takeaway from this thread should be that settled collection debt = paid collection debt and neither of those are to be reported on CR.  When it's settled or paid, the amount doesn't matter. The $500 threshold is for reporting existing collection debt. 

Edited February 6, 2024 by zebo

[MarvBear]

The commentary you provided is mostly true, but there are a few clarifications and updates needed:

1. Paid Medical Debt: Your statement about paid medical collection debt being removed from credit reports is accurate. As of July 1, 2022, the three major credit reporting bureaus (Equifax, Experian, and TransUnion) stopped including all paid medical collections on credit reports, regardless of the amount.

2. Settled Medical Debt: There's a nuance when it comes to settled medical debt. While settling typically involves paying less than the full amount owed, not all settlements are treated the same for credit reporting purposes. Here's the breakdown:

• Settled with zero balance: If you settle your medical debt and pay the agreed-upon amount, it falls under the category of "paid" debt and is removed from your credit report.
• Settled with remaining balance: If you settle for less than the full amount but still owe a remaining balance, this information might still be reported on your credit report as a collection account. However, the reported amount should reflect the remaining balance, not the original debt.

3. $500 Threshold: You're correct that the $500 threshold applies to existing, unpaid medical collections. It means that unpaid medical debts below $500 are no longer reported on credit reports, starting April 11, 2023. However, this doesn't affect whether paid or settled debts are reported.

[zebo]

I agree with everything you in your previous post, but I want to be clear that by settled, I meant what you referred to as settled with zero balance. Don't really get why an account would be considered settled, if there was still a remaining balance owed, but I assume that is an actual scenario. 

 

So this is the ultimate answer to my original question:

 If you settle your medical debt and pay the agreed-upon amount, it falls under the category of "paid" debt and is removed from your credit report.

[Why Chat]

I congratulate you on your success (albeit expensive) in removing the medical account with a scum scam CA from your reports. Although you believe you did the "right thing" and that the advise given by this forum was "bad advice" I beg to differ. The advice given on this forum for medical debt has a twofold purpose, 1st of course is to remove medical debt over 2 years old reported by a CA from reports-- and the 2nd purpose is to NOT pay any scum scam CA who has no legal right to report a medical debt without having been assigned the FULL account data INCLUDING THE HIPAA SIGNED AUTHORIZATION.

[zebo]

In other words, since my medical debt was less than two years old and the CA did have a legal right to report the debt, your advice was misguided and purposeless. Thanks for clearing that up. I'm not going to spell out all of the incorrect advice that was dished out by you and Marvbear. The comments are there for anyone that wants to read through this thread. You and Marvbear are hilarious. Instead of saying, ok, sorry, we were wrong, a lot has changed over the last couple of years regarding medical debt reporting and we've got some catching up to do, here are the comments I've seen:

 

Nice banket statement!

I do not believe it to be true

luck

mostly true, but

success (albeit expensive)

Although you believe you did the "right thing"

I beg to differ. 

 

 

Look, nobody's perfect. People will respect you more if you own up to a mistake. I get you guys are here to help people. The reason I came back here to post my resolution was to help others in the future. And I wouldn't have pointed out the fact that I received bad advice if Why Chat hadn't been such a d***** in his earlier replies.  

Edited February 8, 2024 by zebo