Advice on a credit report dispute

[tokamak 6431]

I pulled my wife’s credit report recently and she has a ~$1500 debt to some company we’ve never heard of. Been unpaid for 3 months now. Turns out it’s a collections agency. The only other useful information on her report is that the original creditor is the hospital where our daughter was born (almost two years ago).

So my wife calls the hospital and finally gets someone there to admit that they had been sending the bill to an old address where we hadn’t lived for more than two years before our daughter was born. Oddly, we did get several bills at our current address for my wife’s portion of the birth expenses (the bill in question is for the baby’s portion). We’ve also never heard a peep (no letters or calls) from the collections agency. We’re not really sure how to proceed now but see three options:

1) Pay the $1500 (or whatever lower amount we can negotiate with the collections people) to make this problem go away

2) Battle it out with the collections agency, hospital, credit bureaus, etc to try to resolve it without paying.

3) Ignore it entirely

 

We’re disinclined to do #1 because we both feel it’s kinda fucked that they made basically zero effort to contact us (keep in mind we got several pieces of mail from them, including bills, to our correct address as well as phone calls) before turning it over to collections. My wife also thinks that this bill is something that would/should have been covered by our insurance at the time, but was never submitted (and now the time limit has passed for that, apparently).

Option #2 is tough because my wife is already getting crushed by work right now and simply doesn’t have the time to do battle with these guys, especially for uncertain payoff. The only entity she’s been in contact with so far is the hospital and has already had a hard time finding someone that knows that the fuck they’re talking about. Unfortunately, she has to handle it pretty much 100% because it’s her credit report, her bill, etc.

We’re leaning toward option 3. We know that it will hurt her credit score for a while, but she already had a very high one (high 700s, IIRC), as do I. Nothing else negative in her entire history. We do plan to buy a new home in the next 3-5 years.

 

What does Surly think? Are there any agencies (state, federal) that we would have any luck complaining to or getting help from?

[hornbri 1399]

If you ignore it, it will still be in your credit report in 3-5 when you try to buy that house. Most likely your lender will make you resolve it at that point before proceeding with the loan. So to avoid that headache later I would attempt to resolve it in someway now. 

Edited December 30, 2018 by hornbri

[tokamak 6431]

OK, damn. We were kinda hoping that it would ding her score some but that we could otherwise move on as-is.

[NeverMarryAStripper 21907]

I would contact the collection agency and offer to do a pay and delete for some fraction of the amount, say maybe 20%. If they refuse say fine contact me when you change your mind.

[Lobwedgephil 1139]

You should be able to settle that for less then $500 is my guess, probably even better. 

[horn4life 3761]

I would first off go to the hospital.  They must have been sending to wrong address?  Because my understanding is that if you even pay a tiny amount on a medical bill they can't ding your credit.  Send a registered letter to the Hospital requesting all correspondence relating to this bill.  I attack it NOT from the collection end, but from the Hosptial end. They probably did fuck up, and you also likely have some responsibility here via lack of follow up. 

I focus on lack of notice from the hospital, prior to turning you over to collections.  

Tape all your conversations from here on out.  Your best case scenario is likely you get them to pull you from collections and you set up a payment plan?  You can settle it for less, but insist on them pullling the debt off your credit report... IN WRITING!!!!

Edited December 31, 2018 by horn4life

[destroya 377]

I went through a similar situation when buying my house. Old medical bill sent to the wrong address and had gone to collections. 

It took a lot of phone calls and dealing with collection agency bullshit. But since the original bill has been sent to the wrong address, the collection agencies completely removed it from my credit after I paid the bill in full. 

I doubt they will remove it for anything less than full payment and that’s only because it was sent to the wrong address. 

[SimonBolivar 10958]

I have a ~$700.00 one from Frontier when I tried to sign up for internet one time. The lady left me on hold for 30 minutes while she tried to contact the installation crew and eventually just hung up on me. I called Spectrum instead and finished signing up with them instead. Sure enough we start getting bills for internet that isn't even installed. I told myself I'd take care of it and just kept on putting it off and now it's in collections. Good times.

[HRSchenker 2268]

Something similar happened to me as well. Thanks a lot to the state of Texas and making it illegal for hospitals to hire physicians, I got 5 different bills for an ER visit. They sent one bill to the wrong address and put it into collections. I contacted the company and told them I would only pay what was originally owed and no fees for late/no payment. They agreed and $500 later I got it off my report.

[tokamak 6431]

17 minutes ago, HRSchenker said:

Something similar happened to me as well. Thanks a lot to the state of Texas and making it illegal for hospitals to hire physicians, I got 5 different bills for an ER visit. They sent one bill to the wrong address and put it into collections. I contacted the company and told them I would only pay what was originally owed and no fees for late/no payment. They agreed and $500 later I got it off my report.

That's the crazy thing about this deal. Having a baby generates a shitload of bills from a number of different providers (hospital, doctor, anesthesia, etc etc). They all got to us except this one. We literally had no idea it existed until it showed up on her credit report. We would have never given them the address they were sending it to, as we hadn't lived there in over two years.

 

Thanks for the responses, everyone. Seems like our best bet is to just bend over and pay. Sucks that these clowns can hold your credit score hostage based 100% on their fuckup.

[Liquor and Poker 3659]

Good luck going down the credit route.  Amex still insists I owe $80 for a GoldCard charge I supposedly left unpaid in 1978.  I was 8 years old.  When I pointed this out, Amex responded with “So?”  

Equifax threw up their hands because Amex wouldn’t budge. TransUnion and Experian marked it “disputed.”  That’s all they would do.  

It never left because I just refused to pay out of principle and because it doesn’t matter since it was 40 years ago.  

 

[NeverMarryAStripper 21907]

After 40 years it can’t be on your credit report anymore

[McCroskey 1504]

On 12/30/2018 at 4:59 PM, hornbri said:

If you ignore it, it will still be in your credit report in 3-5 when you try to buy that house. Most likely your lender will make you resolve it at that point before proceeding with the loan. So to avoid that headache later I would attempt to resolve it in someway now. 

That's true about it still being on the report, although lenders these days look at medical debt quite a bit differently than non-medical.  May vary by lender but I wouldn't be surprised at all if you weren't made to pay it by providing sufficient documentation to your lender on the dispute.

The other good news is that in 3-5 years, when the collection is 5-7 years old (it falls off your report at 6 yrs and 10 months from the date filed), the impact to your score should be lessened to a pretty significant degree, and even more if the mortgage industry transitions to a newer FICO model by that time.  The newest FICO models all but ignore medical debt regardless of amount but unfortunately, most lenders haven't adopted them yet and the mortgage industry itself is locked into Fannie/Freddie approved scores which are all 15+ year old FICO variants.

[McCroskey 1504]

On 12/30/2018 at 9:19 PM, horn4life said:

I would first off go to the hospital.  They must have been sending to wrong address?  Because my understanding is that if you even pay a tiny amount on a medical bill they can't ding your credit.  Send a registered letter to the Hospital requesting all correspondence relating to this bill.  I attack it NOT from the collection end, but from the Hosptial end. They probably did fuck up, and you also likely have some responsibility here via lack of follow up. 

I focus on lack of notice from the hospital, prior to turning you over to collections.  

Tape all your conversations from here on out.  Your best case scenario is likely you get them to pull you from collections and you set up a payment plan?  You can settle it for less, but insist on them pullling the debt off your credit report... IN WRITING!!!!

100% agree with this approach...although I can't vouch for the claim that collection agencies can't ding your credit if you are making even a tiny payment (haven't heard of that one).  That said, depending on the nature of the balance and your story, the hospital may (and I stress may) be able to recall the account from the collection agency and basically force them to remove it from your file for you...and then as mentioned set you up with a payment plan.  It's old enough though they may not be able to recall it, which means you may have to deal directly with the collection agency at this point depending on who owns the debt.  I see this kind of thing happen from time to time although I unfortunately can't point to the specific rules or laws on why.  Probably even varies by state.

One thing is for absolutely sure though, don't deal directly with the bureaus.  All they can do by law is go directly to the data furnisher (the collection agency in this case) and ask them to validate the amount/history.  Since everything sounds like it was posted by the book, albeit by a mistake on someone's part, nothing is likely to happen by going this route.

[George 493]

If you wanted to pay it, you could sent payment to the hospital. If they accept Then the collection is invalid I think. Worked for us on a 200 hospital bill. 

[Dendox 102]

most hospitals (if large enough) don't really sell their bills to collections companies.  they have their own in house collection agencies with names that don't sound like the hospital, rather like a collection agency.  If this is one of those situations, you will likely have better than average luck working through the issue with the hospital.  

[Reagan1k 3024]

1 hour ago, Dendox said:

most hospitals (if large enough) don't really sell their bills to collections companies.  they have their own in house collection agencies with names that don't sound like the hospital, rather like a collection agency.  If this is one of those situations, you will likely have better than average luck working through the issue with the hospital.  

Yep - Take the paid bills showing the proper address and the unpaid bill or the collection report from the wrong address and physically go to the hospital's business office.  They will have someone there with whom you can reason and who can call off the "collection company" . 

You may be able to settle for a percentage since it was their error, and/ or set up a payment plan if you so choose..but this is the fastest way to get it off your credit report.