Insurance and Credit

One of the most common questions that I receive from people struggling with their household finances is, How do I stop collection agencies from harassing me? Many of the people asking me about the harassment they are enduring from debt collectors come from divorced individuals. I recently got an email from a divorced lady whose ex-husband had quit paying the bills he agreed to pay in their divorce decree. Her situation is not unique.

The story often goes like this: Girl marries boy. Girl and boy divorce. Boy hates girl. Boy vows to make girl’s life miserable. Boy fraudulently obtains multiple joint accounts with Girl’s information. Boy wracks up an ungodly debt and drops off the face of the earth. Girl is stuck holding the bag.

Don’t assume that a divorce settlement resolves who gets what debt. If a partner fails to pay on that debt, and it is a joint account, you are on the hook. Debtors do not care what the divorce court says, their collection efforts are not governed or limited by a divorce settlement. This is unfortunate, but it is legal. You were the co-signer.

The lady I received an Email from was experiencing this very thing. Six years ago, she had wrangled with debt collectors, and refused to cooperate in paying for a single dime her ex-husband had squandered and left unpaid. As time passed, the collection calls tapered off. Now, over half a decade later, she is getting those same calls again. The debt collectors are now trying to collect almost $9,000 along with interest and fees for the past-due amount.

My sympathies were certainly with her. After having remarried and left the past behind her, it was rearing its ugly head again. She wanted to know, How can these collection agencies legally harass me for my ex-husband’s actions? We’re not even married any more! She also asked the more practical question of, How do I stop the collection agencies from chasing me for these bills?

If you allegedly owe money to a creditor, they may pursue you until they tire of the chase. When this happens, they often sell the rights to collect that debt to a collection agency. While there are state statutes on how long you may be pursued, the start date is based upon when the collection agency purchased your account. To avoid the account exceeding state statutes, collection agencies routinely buy and sell accounts amongst themselves. This process is known as re-aging debt, and can continue indefinitely.

Onto the first question of what to do. I had no easy answer. Repairing credit and disputing collections takes work. In the case of collections, it will probably mean repeating your efforts, at some point in the future. So, what can you do?

Don’t spend all of your time placing dispute comments on your credit reports. Nobody reads them. If you spend the time to even argue the collection, by placing a comment, you may actually be hurting yourself. It also makes this bad debt stand out on your credit report. Exactly what you don’t want to have happen. How much can you say in your defense when the credit bureaus only give you 100 words to dispute a claim. It just isn’t worth it.

Don’t be afraid to dispute a collection account, but be smart about it. Demand documented proof that the account belongs to you, and any supporting evidence that the collector can legally make attempts to recover the debt. Legally, if they cannot prove the debt is yours, they may not report it to the credit bureaus or continue their attempts to collect. If you know the steps in this process, you can be surprisingly effective in shutting down their efforts. Most collection accounts have been repeatedly bought or sold, and the paperwork can often be sketchy.

Check your state laws. Collection agencies are often contemptuous of the statute of limitations on debt collection, unless you are knowledgeable enough to threaten them with your knowledge of their violation.

One of the most effective methods of halting those annoying calls and letters is a cease and desist letter. Both the state and Federal government have laws that regulate debt collection to protect you, the consumer. Once you issue a cease and desist, federal law prohibits the collection agency from pursuing you by phone or mail for that account, other than to acknowledge that they are stopping their efforts.

As a last ditch effort, you can offer to settle the debt. You may tire from the efforts of the debt collections, and just want the whole problem to end. If so, offer to pay ten cents on the dollar. In return, the collection agency must provide you with a letter stating that your account is settled, and will be removed permanently from your credit report. Never, never settle for a verbal agreement. A collection agency will tell you just about anything you want to hear, as long as they think that they can get at least some money from you. Since they normally pay pennies on the dollar for your debt, they are still making money on you. Insult to injury, they will sell the remaining debt, and the process repeats itself.

If you are facing collection efforts, don’t be afraid to fight back. If they’ve damaged your credit, you can do something to repair it. Your efforts will probably result in a higher credit score, and will certainly reduce the efforts of collection agencies. If you are struggling with collectors, and the process just seems too frustrating, you may want to consider using a reputable credit repair agency. One of the companies with a reputation for effectively dealing with collection agencies is Over720.com. They are the only credit repair company that I’ve found that will repeatedly confront collectors. Most of the credit repair companies will remove your bad account from your credit report, and it will reappear six months down the road. The account was sold, and a new collection agency is working the file. Over720.com is the only company that will resolve any recurrances, free of charge. I have to admit, they are tenacious and serious about getting results. That’s not very common in the credit repair industry.

Decide how you are going to resolve your collection issues, and then act. In today’s economy, your credit score is too important to be damaged by a collection agency. Be tough, and you can resolve those issues.

Who isn’t struggling to pay off debt these days? Whether it’s credit card bills or student loans, most people seem to be overwhelmed by a flood of debt that never seems to subside. It has been noted that a growing portion of that debt is related to costs associated with medical procedures. A few hours can equal a few thousand dollars of medical debt, which may take a few years to pay off. This struggle with high medical costs has been a leading factor in the rise of America’s divorce rate in the last few decades.

With such a huge problem weighing on the minds of many good people, you might think more practical solutions would be presented. But alas, most advocates of health care reform live in the theoretical and never speak to real-world answers for the here and now. To wit, here are four practical tips for reducing medical bills and avoiding the resulting debt.

1. Shop Price. If you know you have a procedure coming up, it is important to shop around for the best price. A mistake many people make is assuming all doctors or hospitals charge the same. That is simply not the case. You wouldn’t have your garage door repaired without trying to find the best deal. Why should it be any different with a colonoscopy or a breast exam? Another mistake is in assuming that if you have insurance, there is no need to fret with the details of medical billing. Remember that the total bill will affect your out-of-pocket cost, so do yourself a favor and shop around for quality care at the best rate.

2. Get an Itemized Bill. Hospitals make mistakes like any other business. And like any other business, there is always the possibility of the cost of a service being over-inflated. As a matter of practice, most hospitals do not give you an itemized bill automatically, so you must ask for one. This could mean several hundred to several thousand dollars of savings if you catch a mistake or call out a grossly over-stated line item.

3. Watch out for Medical Codes. Every procedure that is billable gets coded using a standard medical coding system for diagnosing and treating medical concerns. Why should you care about these codes? Well, it is best explained with an example. Say you have a history of migraine headaches, and you visit the emergency room complaining of pain in your forehead. Ultimately, you find out it was a sinus issue and you leave. The doctor may code the diagnosis as a sinus headache or possibly a migraine headache, maybe because you mentioned that during the exam. Well, if it was coded as a migraine and your insurance company has that down as a preexisting condition, they will refuse to pay, even though you really just had a sinus headache. If you find one of these mistakes, talk to the doctor or nurse that did the exam. They may recognize the error and resubmit the paperwork.

4. Request a Discount. Everyone knows someone who is either without medical insurance, or is lacking significant medical coverage. For example, securing an independent insurance policy that covers maternity is near impossible these days. But if you find yourself without insurance, you may be eligible for a discount. The cost of filing insurance claims has driven costs higher for doctors and hospitals, and they have responded by increasing the prices you pay. However, in many cases, if you pay them directly and thus absolve them from having to file insurance paperwork, they may cut their prices dramatically. Other discounts may be given for up-front payment or early registration. Do inquire about discounts any time you are facing a significant medical procedure.

Debt consolidation companies are the organizations that help you find a solution for the never-ending debt trap. Debt consolidation companies work to reduce your debt burden, the stress of collection calls, high finance charges, late payment charges, and over the limit charges.

Debt consolidation companies work in several ways. The first way is to consolidate all of your loans and credit card payments into one single loan at a lower rate of interest and for an extended duration, so that you can comfortably work towards paying off the debt. This is called a debt consolidation loan.

Another method a debt consolidation company uses is debt counseling in which the counselors help you stick to a financial discipline and manage your debts. In this way you do not have to take out a fresh loan to repay your previous debts.

Sometimes you can also do debt consolidation without a loan. In this process, the debt consolidation company negotiates lower interest rates and charges with your creditors. You make one monthly payment to the debt consolidation company and they make the monthly payments to your creditors.

If debt consolidation, a loan, or debt counseling is not what you need, the debt consolidation company can help you obtain a debt settlement. The debt consolidation company will discuss your financial situation with the companies that you owe money to and try to obtain a settlement amount that is much less than the total amount that you owe. You will be able to make one payment to the debt consolidation company each month, and in turn, they will send payment to the companies that have offered you a settlement for your debts.

The counselors of debt consolidation companies educate you by changing your attitude towards money and helping you rationalize your monthly expenses. By this, you can increase your monthly repayments, which will reduce your debt burden and gradually help you to become debt-free. However, debt consolidation counselors cannot help you unless you impose financial discipline on yourself and cut out excess spending.

You can also seek help from nonprofit debt consolidation companies who may help you reduce your monthly payments. Since these companies do not work for profit, they do not buy your debts and loans. Rather, they focus on reducing your monthly payoff by negotiations and settlement to ease your debt burden. Debt consolidation companies want to help you consolidate your bills and become debt free.

For a free debt consolidation quote, please click on the link Debt Consolidation.