A new report shows that Arizonans have filed 439 complaints with the Consumer Financial Protection Bureau (CFPB) about medical debt collectors since the bureau started tracking such complaints in 2013. This is apparently the 11th highest rate of complaints in the nation, according to a Cronkite News report. The report issued by the U.S. Public Interest Research Group Education Fund said the almost 18,000 medical debt-collection complaints submitted to the CFPB made it the leading complaint to the agency.
Of those complaints, 63 percent were about firms trying to collect debt that was already paid, discharged through bankruptcy, unverified or never owed. The remaining complaints talked about aggressive or illegal behavior on the part of these medical debt collectors including impersonating lawyers, threatening jail time or even threatening physical violence. Consumer advocates say millions of Americans are holding medical debts on their credit reports and often, this is “false medical debt.”
What Collectors Can and Can’t Do
These aggressive collection practices are not necessary illegal, but agencies are bound by state and federal laws such as the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Dodd-Frank Act. There are limits under these laws on what collectors can and can’t do. For example, collectors cannot call debtors between 8 a.m. and 9 p.m. and cannot continue to call someone who has said they don’t owe the debt.
Collectors also cannot make false statements to collect debt and are prohibited from making threats of any kind. However, debt collection agencies frequently break these laws and use every trick in the book. Such collection efforts often hurt consumers by leading to bungled credit reports.
How the Process Works
So, how does the process work? When healthcare providers cannot collect the debt, they hire a collection agency to do so. If that doesn’t work either, the provider can sell the debt to a third party for pennies on the dollar. This cycle of buying and selling the debt goes on. So, often, collection agencies that get this debt years after it was incurred deal with old contact information.
They don’t have updated information on how much is owed or what the claim is worth. The system involves so many different parties from hospitals and insurance companies to collection agencies and out-of-network doctors, making accuracy challenging. This is why it is important for consumers to thoroughly understand their rights when it comes to debt collectors, including medical debt collectors.
Tips to Handle Debt Collectors
There are several steps you can take if medical debt collectors are harassing you:
Filing for Bankruptcy
If you find that there’s no way out of a medical debt, talk to an experienced Arizona bankruptcy lawyer about filing for Chapter 7 bankruptcy. In fact, nationwide, mounting medical bills are the number one reason people file for bankruptcy protection. Chapter 7 bankruptcy can help individuals struggling with certain types of medical debt including medical bills who simply don’t have the means or the income to pay back their creditors. One big advantage of using Chapter 7 to discharge medical debt is that the process is generally quick, allowing you to get a fresh start. Also once you file for bankruptcy, those pesky collection companies are prohibited from calling you!
Call (480) 745-1770 or fill out our contact form to get help from compassionate professionals. Stop worry and get help today.