Published On: August 29, 2021
Dirty Little Secret – medical bills are the highest they have ever been and debtor buyers are paying pennies on the dollar to purchase the debts, but then sue the borrower for the full amount of the debt.
Article Yahoo!Finance, Adriana Belmone, June 21, 2021
“Medical debt is the no. 1 cause of bankruptcy in the United States, which is something that’s obviously a uniquely American problem,” Allison Sesso, executive director of RIP Medical Debt, said on Yahoo Finance Live. “So we’re out there trying to give people relief from this economic burden. We’ve got donors that are excited across the country to do more of this debt relief. That number — 278 million — we’re very proud of that, but we have a lot more debt relief ahead of us.”
Roughly 21 million Americans holding $46 billion of medical debt as of April 2021 face collections — meaning that a third-party debt collector is trying to obtain the money owed — according to Credit Karma data previously provided to Yahoo Finance.
How the Debt Collection Agency Business Works,
Investopedia, article by Amy Fontinelle, updated August 21, 2021.
Debt collectors often work for debt-collection agencies, though some operate independently. Some are also attorneys. Sometimes these agencies act as middlemen, collecting customers’ delinquent debts—debts that are at least 60 days past due—and remitting them to the original creditor. The creditor pays the collector a percentage, typically between 25% to 50% of the amount collected. Debt collection agencies collect delinquent debts of all types: credit cards, medical, automobile loans, personal loans, business, student loans, and even unpaid utility and cell phone bills.
Collection agencies tend to specialize in the types of debt they collect. For example, an agency might collect only delinquent debts of at least $200 less than two years old. A reputable agency will also limit its work to collecting debts within the statute of limitations, which varies by state. Being within the statute of limitations means that the debt is not too old, and the creditor can still pursue it legally.
MUSINGS BY DIANE:
No one wants medical debts, yet that may be the only way you can save your family member who is suffering with a disease or injury. From my own personal experiences I know the scams that the medical system is suffering on us all. If you need health care and have really good insurance (if that is an option) then you will not be faced with choosing between paying your mortgage or the hospital so they will operate to save your life.
Why do I know the truth? Because I have had several knee surgeries (same knee) over a 4 year period. The bill for the first surgery was about $125,000, my co-pay was about $1,000, and the insurance company was billed about $29,000. That means the hospital/doctors over-charged by $95,000. When I asked a hospital administrator about the extra $95,000, I was told that is the amount they would have billed anyone who did not have good insurance (they were talking about my clients who can barely afford to feed their families). My husband went to the emergency room for fractured ribs. We were there for 8 hours, he had a cat scan. The final bill was $12,689, our co-pay was $231, and our insurance was billed $300.
This is wrong. No one should have to delay necessary medical treatment because they cannot afford it. No, I am not a socialist, but I am a pragmatist. Greed should not be part of our medical system.
– Diane L. Drain
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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