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Getting hurt in a car wreck can lead to unexpected medical bills and other expenses that can seem impossible to pay back. Medical providers often threaten to send their bills to debt collection in the event of non-payment. A car wreck is a traumatic event and the last thing you need is to worry about debt collection agencies coming after you for outstanding medical bills. But this is the unfortunate reality of car accidents and it is important to know how to prevent bills from going to debt collection agencies and what to do if you get contacted by a debt collection agency after a personal injury accident.
How Do I Prevent My Medical Bills from Going to Collections?
Set Up a Payment Plan
Medical providers typically only get a debt collection agency involved when it appears likely that you cannot pay the outstanding balance. Do whatever you can to consult with your medical provider, explain your financial situation, and set up a payment plan to avoid getting contacted by a debt collector. Medical providers will typically be sympathetic of your situation and will accept a small monthly payment. They simply want to make sure you are on track to pay off the medical bills and doing so will often keep the providers from sending your bills to collections.
Dispute the Validity of the Debt
Sometimes medical providers make mistakes or overbill you for your medical treatment. If this is the case and you disagree with the amount of the bill or the type of bill you can dispute the validity of the debt. The Federal Fair Debt Collection Practices Act (FDCPA) and the Texas Fair Debt Collection Practices Act afford you the ability to notify the medical provider about the inaccuracy of the debt. The medical provider is then required to investigate the debt’s accuracy.
Wait to Pay the Debt
Simply waiting to pay the debt can be an effective way to allow time for personal injury claimants to evaluate their options. After a 2015 settlement agreement between 31 states and the 3 main credit reporting agencies, the parties agreed to create the National Consumer Assistance Plan (NCAP). This plan requires medical debt to not be reported on your credit report until it is 180 days past due. The credit reporting agencies must also remove the bad debt from your credit report once you have paid the debt.
Medical providers will be eager to send your bill to a debt collector if they think you will not be able to pay it back. Failing to act early can lead to you getting contacted by a debt collector before you are prepared to deal with one. It is important to know how to deal with debt collectors and what your rights are as a debtor if this happens to you.
What is a Debt Collector?
According to the FDCPA a debt collector is any person or agency with the principal purpose of collecting debt and who regularly collects or attempts to collect debt owed by another. Debt collectors are usually hired by a creditor to collect the debt from people that cannot pay their debt or that just chose not to pay. Reasons a debt collector may contact you include:
- They have been hired to collect a debt that a creditor believes is past due.
- A debt buyer bought the debt and is now seeking to collect the debt.
- Sometimes a debt collector may call you to ask for the location of an individual you know. However, the debt collector may not disclose that they are collecting debt of that individual. When this is the case, debt collectors are limited to questions concerning where the person lives, their phone number, and where they work.
How Can a Debt Collector Contact Me?
Debt collectors can contact you through virtually all means of communication including in person, by mail, telephone, email, or fax. Unless you explicitly agree, debt collectors may not contact you before 8:00 a.m. or after 9:00 p.m. local time. Additionally, a debt collector is not allowed to contact you at work if the debt collector knows that your employer disapproves of such contacts. If you wish not to be contacted at your workplace, make sure to make it known to the debt collector that your employer does not approve of the contact. Debt collectors are not limited to contacting you personally, they may also speak to your spouse, your parent (if you are a minor), your guardian, and your attorney that is representing you for that specific debt collection.
If you do not want a debt collector to contact you or your spouse, you have the option of writing a letter to the collector telling them to stop. Once this is done and the collector receives the letter, they are not allowed to contact you or your spouse anymore regarding the debt. The debt collector can, however, contact you again to let you know that they plan on taking further action. Just because you tell a debt collector to stop contacting you does not mean that you no longer owe the debt. The debt collector and the original creditor still have the option to sue you to obtain payment.
What Are My Rights as a Debtor?
The Fair Debt Collection Practices Act is a federal law that gives debtors certain rights. Additionally, Texas regulates debt collectors through the Texas Debt Collections Act. Understanding these key rights will allow you to better deal with debt collectors. These rights include:
Right to Written Explanation of Debt
Once you have been contacted, the debt collector has 5 days to send you a written notice disclosing information about the debt including:
- The name of the creditor that you are in debt to.
- The amount you owe.
- What to do if you believe you do not owe that amount.
Right to Know the Debt Collector or Debt Collection Agency
The FDCPA requires that debt collectors identify themselves and the agency they work with if applicable. They must also disclose to you that any information you provide can be used against you to collect the debt. Once they have provided their identification you can find more information about them through your state’s attorney general’s or consumer affairs office.
It is important to determine the legitimacy of the collector before even considering payments because of the prevalence of debt collector scam artists. These are people who fraudulently claim to be a debt collector and try to take advantage of debtors through coercive tactics. These scammers will generally:
- Demand immediate payment.
- Threaten criminal acts for payment.
- Refuse to disclose personal identity or agency name.
- Ask for financial information such as bank account information or social security number.
- Ask for payment methods such as cryptocurrency or wire transfers that are harder to track than more typical forms of payment.
Right Not to Be Harassed with Abusive or Fraudulent Collection Tactics
Debt collectors are regulated by the Texas Debt Collection Act and must obey these regulations when acting in their capacity as a debt collector. This Act prohibits debt collectors from coercive and fraudulent collection tactics such as:
Coercive Debt Collection Tactics:
- Threatening to use violence.
- Using profanity or offensive language.
- Falsely accusing the consumer of crimes.
- Threatening to arrest the consumer or seize their property without proper court proceedings.
- Harassing the debtor through continuous phone calls.
Fraudulent Debt Collection Tactics:
- Trying to remain anonymous or using a false name.
- Misrepresenting the debt amount or its judicial status.
- Sending documents to a debtor that falsely appear to be from a court or other official agency.
- Failing to identify who holds the debt.
- Misrepresenting the nature of the services rendered by the collection agency or collector.
- Misrepresenting that the collector has information or something of value to discover information about the consumer.
- Trying to collect more than the amount originally agreed upon.
A Debt Collector is Not Prohibited from:
- Informing the debtor that the debtor may be arrested after proper court proceedings if the debtor violated a criminal law.
- Threatening to institute civil lawsuits to collect debt.
- Threatening to exercise a statutory right of seizure, repossession, or sale that does not require a court proceeding.
Right to Dispute Incorrect Debt
To dispute a debt, you must send a dispute letter to the debt collector by certified mail. After this, the debt collector must determine whether your debt is valid within 30 days. If the debt collector determines that the debt is inaccurate within 30 days, then they must correct it. If the debt is accurate then the debt collector can continue collection activities. If the debt collector cannot determine the validity of the debt within 30 days, then they are required to make the change you requested in the dispute.
How Do I Report a Debt Collector?
Personal injury debt collection agencies that violate these regulations are subject to criminal and civil penalties. These can also be violations under the Texas Deceptive Trade Practices/Consumer Protection Act which grants the Attorney General the authority to take action. According to the Finance Code Chapter 392, a violation of the above rights is a misdemeanor punishable by fine of not less than $100 and not more than $500 for each violation. Civil remedies include injunctive relief, compensation for actual damages sustained due to the violation, and attorneys’ fees accrued related to the violation.
To report a debt collector, you can contact the Texas Attorney General’s Consumer Protection helpline to discuss your complaint with a representative. You can also file a complaint with the American Collectors Association of Texas, which is an organization that represents third-party collection agencies in Texas.
What is a Credit Report?
A critical part of dealing with debt collectors is to know exactly what debt you owe. You can find out your debts by getting a credit report. A credit report is a summary of your credit history. You are entitled to one free credit report once a year from each of the three nationwide credit reporting companies (Equifax, Experian, and TransUnion). These are national credit bureaus that collect and update your credit history to provide an accurate report. You can order online from annualcreditreport.com (Caution: you must use this website to obtain the free report; do not use other third-party websites or the reporting companies’ own website). To verify your identity, you will need to provide your name, address, social security number, and date of birth. Your credit report will generate a credit score which shows your ability to pay back loaned or borrowed money.
Credit scores are measured on a scale of 300 to 850. Generally, a score of 700 or above is considered a quality score and the higher the credit score the better interest rates you will get from creditors. If you choose not to pay your debt you can receive a derogatory mark on your credit. A derogatory mark is a negative indication on your credit such as a missed payment, collection, or foreclosure, and will remain on your credit for about 7 years. Essentially, if you do not plan to use credit for the next 7 years then it is not the worst-case scenario to not pay your debt and receive a derogatory mark. However, if you do plan on using credit to buy a house or a car then it is less than ideal to get a derogatory mark because you will have a difficult time finding a creditor.
Thompson Law Will Guide You Through Your Personal Injury Case
Our attorneys here at Thompson Law are committed to getting you the compensation you deserve when you get injured at the hands of another person. Dealing with a car wreck or other injury is something that you do not have to do alone, and our personal injury attorneys will assist you every step of the way. Call us at (844) 308-8180 today for a free consultation.
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