Insight regarding a pending debt collection court case?

Question

I will likely be getting legal assistance in this matter but I'm looking for some insight. I have a past due medical bill that I am being sued for. Included in the suit are attorney fees and court costs. The debt is real however payment is still pending from my health insurance company. It has been an ordeal trying to get this resolved. This insurance company goes out of their way to avoid payments. I received no collection calls or letters from an inside collection department. The hospital sent the matter directly to an attorney for suit approximately 90 days after the date of service. Under 15 USC § 1692 the attorney contacted me inquiring about validating the debt. I replied that I do not validate the debt because a claim for it remained unprocessed with the insurance company. I stated also under 15 USC § 1692 that since the debt is not validated they are to suspend all collection attempts. The attorney wrote back saying that since I did not provide permission for them to access my medical records they are assuming the debt is valid and are taking me to court.

I know it is customary for the losing party to be required to pay court costs and sometimes attorney fees. But in this situation wouldn't the attorney fees equal the cost of debt collection normally paid by the creditor? It would be one thing if I had done something malicious and they were seeking restitution. I do not recall there being any contractual agreement stating that I would pay collection costs. There may be one.

As I understand part of 15 USC § 1692 states that the collector must notify me of the request to validate the debt within 5 days of the first contact. In this case the request was the first contact.

Can the attorney simply assume the debt is valid as they did? I would not provide anyone other than one whose care I am under access to my medical records and legally do not have to. This would be a simple matter of the attorney contacting the hospital, his own client, and check with the billing office to see if the claim was denied, which it was not at the time.

This is in Illinois. The fees are $10,000 by the way.

jslinderml · Accepted Answer

I'm guessing the 'attorney' who contacted you was a debt collection firm, which is different than a full blown attorney,  Most of these operate call centers, with their name on the letterhead an many are associated with shady tactics.

You have a couple of issues here.  

1>  The insurance company.  Without knowing specifics I can't say what your expectation of payment is, but you may end up taking them to court.  If you do and can prove malfeasance, they MAY (and its a big may) be liable for downstream costs.

2>  Payment.  Unfortunately, waiting for insurance does NOT mean payment can be delayed unless agreed with the hospital in advance.  When it comes down to it, legally you are responsible for all bills, not the insurance company.   The reason the attorney requested access to your medical records was to confirm the status of any claim.  Since you did not permit that, they can assume that the debt is valid.

3>  Under most states law, the debtor is responsible for reasonable and customary collection costs.  Illinois appears to be one of those.  With that said, $10,000 in costs seems excessive unless we are dealing with a bill in excess of $100K.  

What I might suggest is contacting the collector handling the account and enlisting their help with the insurance company.  In return, you will sign the proceeds from insurance, up to the amount of the debt plus reasonable fees over to them, to them up front.  They may not agree, but they might, in their own interests if this is the best chance to get the money.

Anonymous · Answer

First off, is this debt within the states statute of limitations to seek legal action? In Florida the SOL is 4 years for open end accounts (credit cards) and 5 years for written contracts. If the debt is "time barred" meaning they can not seek legal action then show up and use that as your defense, the court will have to dismiss the case. If it is not "time barred" then show up anyways and try to work out a payment plan with them prior to the hearing. In most cases a payment agreement can be worked out. Also check to see if the collection agency (or lawyer hired by them) is duly licensed in the state of Florida, without a proper license, they can ot sue you. I have also included a link to the state statutes regarding garnishment in the source area. Read it so you know what to expect. Hope this answers your question

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Insight regarding a pending debt collection court case?

2 Answers