Hold collectors at bay by keeping accounts current
By Sally Herigstad
To Her Credit
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
I am 23-year-old graduate student trying to get on my feet. A
little over a year ago I had a life-and-death situation and had to go to the
emergency room. The first emergency room could not do anything for me so I had
to go to another hospital. Now I have huge bills from both hospitals.
Yesterday I received a phone call from a collection agency
concerning the bill from the second hospital. I informed them that I am unable
to pay because I'm not working and am currently attempting to pay off the first
hospital bill.
Not long before I got sick and had to go to the emergency
room, I got married. Now the collection agency is threatening to garnish my new
husband's wages. It is already difficult to be a college student and not
contribute to the household income. I got really upset when they were
unsympathetic, even though I told them that as soon as I finished off the first
doctor bill I would start paying on their bill. The collection agency was very
rude and threatened to process my account and attempt to collect the debt.
It is hard being a newlywed and now I feel like I have
become a burden to my husband and my marriage due to a hospital bill. We do not have any medical insurance because
we cannot afford any. I don't know what to do and am open to suggestions. -- Jessica
Dear Jessica,
I know you feel bad about not contributing to the family
finances and now having big medical bills, but you and your husband are in this
together "in sickness and in health." He wouldn't have married you if
he thought you were a burden. Besides, you should have many, many years to make
it up to him.
If you live in a community property state -- Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin --
unfortunately the collection agency is right. New York attorney Edward E. Neiger says, "If
this is a community state, then a spouses' wages are considered marital
property and they can be garnished."
"In a noncommunal property state, wages are safe,"
Neiger says. If you don't live in one of the states listed, the collection
agency is bluffing. They cannot garnish your husband's wages.
Either way, you are liable for the bill. I'm curious as to why
you are paying the hospital that didn't help you before you pay the one that
apparently saved your life. If it were me, I'd be more anxious to pay the
second one. I might even challenge the first hospital bill, depending on how
far they got before they decided they couldn't do anything!
In any case, it's seldom a good idea to make payments just
to one creditor and expect the other creditor to wait their turn. Hospitals
will take your other bills into consideration when they figure out what you can
pay, but hospital No. 2 is not going to wait for its first payment until hospital
No. 1 is paid in full.
You may be able to get your hospital bill reduced or
forgiven in your situation. However, it won't happen unless you ask. Go to the
patient accounts services department of the hospital and ask to speak to a
representative. Be prepared to give information about your monthly income and
expenses. They will generally take your case to a committee and get back to you
with the results.
When you know how much of the bill you have left to pay, sit
down with a patient accounts representative and ask to work out a payment plan.
Once you have a plan and are sticking to it, you won't have to worry about
collection agencies or garnishment of wages.
Don't take it personally when collection agencies are rude.
It's not their job to be sympathetic. Their job is to scare, shame or otherwise
somehow get you to send them money. As unpleasant as that is, there are some
people out there who wouldn't pay their bills any other way. The bill
collectors can't tell you, as a person who is doing the best you can, from the
deadbeats who don't try.
Don't even waste your time talking to collection agencies on
the phone. If they call again, tell them to communicate with you only by mail. By
law, they cannot keep calling you after you've told them to stop.
As you've discovered, a medical emergency can happen to
anyone, at any age. As soon as possible, find a way to get catastrophic
insurance for you and your husband so you won't find yourself in this situation
again.
Sally Herigstad writes about women and credit every week for CreditCards.com. Herigstad is a writer and finance consultant for MSN Money, a personal finance software product. She is also a member of the Washington Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Her Web site is http://helpicantpaymybills.net. Sally Herigstad lives in Kent, Wash., with her husband Gary. They have two grown children, Valia and Grant.
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
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