I have been served by a debt collector, what can I do?

Court Summons

Even though we suggest you do not pay debt collectors outright, we also suggest you never ignore them. This goes double if they are in your state. Debt collectors in your state are more likely to take you to court. This is why you must answer their letters immediately and actively.

If you ignore a debt collector that is in the state, they will most likely raise the amount they feel they owe you. They might do this multiple times. I have seen a literal 89 dollar debt “become” 389.00 from ignoring their letters. Other language to beware of is if they say in their letters they will take you to court. They would love nothing more than to take this inflated debt to which you have signed no agreements and get a judgment and than garnish your wages. One tactic I always suggest is to attempt to pay the originator of the debt. Once you have paid them to head to court with this receipt. This will shut the case down and probably cost you much less than if the debt collector wins.

After you have received the summons, the first question you have to ask is would it be better to call them and pay them off immediately. Hiring an attorney can be cost-prohibitive for a small case like this. If you are getting sued for $389, do your self a favor and call them up and put the charge on your credit card. Most debt collectors are not in settling mode once they have done an affidavit. Still, that doesn’t mean you shouldn’t attempt. You are just not going to get the deal you would have earlier when they first sent you letters. This is a reason you should always respond right away when sent a letter from them.

Once you receive the summons you have basically 4 options. We already discussed hiring an attorney. You can also hire a paralegal to do the answer paperwork for the summons. You will still have to represent your self if court if you take this path. Still, representing yourself is much better than not showing up at all. There are various books on Amazon you should read beforehand to help prepare yourself.

In Utah, we also have Legal Clinics that can help you with the answer paperwork also. This can take away the cost of the paralegal doing the paperwork. In Utah, we are also lucky enough to have an online assistance program to help you through the paperwork. This last option is easy enough if you make sure to read all the instructions. If your not the kind of DIY person that does your own taxes, then you should probably hire someone to do this paperwork.

Your goal in all of this is to keep from having a judgment made against you. Making sure you attend that court date will help prevent this from happening. Don’t show up to the court date empty-handed. Take as much evidence as you possibly can to prove that this is not your debt.

You should have taken notes with your interactions with this debt collector and the original creditor. If you have a lack of evidence, it might just be better to outright pay the debt. Still outright paying the debt instead of going to court the debt collector still might pursue a default judgment leaving you with having to purse a vacated judgment. Ensure if you pay that they give you the paperwork dismissing the original affidavit or at least a document saying they will. Debt collectors have even been known to show up, make deals with the defendant and still pursue a default judgment.

Do you still have a judgment on your credit report? Chances are this is hurting your credit score. Contact us today at Wasatch Smart Finance to get this erased from your credit report.

My medical bills are out of control what can I do?

Medical Debt

We at Wasatch Smart Finance are not fond of the medical industry, nor are we fond of medical billing practices. We feel between medical institutes and insurance companies this “business” sector could not be more confusing. Not only that what the industry gets away with, taking a stab in the dark at what’s wrong with you usually getting it wrong and still get to charge a hefty amount? Think if your car mechanic behaved as your doctor did?

How many of you received a bill from a medical institute and it was way more than what you thought it should have cost? How many of you received a bill and you thought the bill was outrageous or even worse you received a bill because your insurance company came up with a bogus reason not to pay it. The last thing you ever want to do is ignore a bill from the medical institute, the earlier you address it be the more favorable the outcome will be for you.

When you get to a medical institute for treatment let them know right away that want to know how much everything is going to cost upfront. Many medical facilities try to assist with keeping this transparent and have financial counselors to help you weed through the confusion. Ask to see one, ask them to commit to the price of what things cost. Take a video of the counselor saying exactly what things cost. Another step might be to see what type of financing they have available. Ensure this financing is zero percent financing.

Another idea is to check upfront for medical institutes that use upfront pricing. Here is a startup called HealthCare Bluebook. They try to refer you to providers with upfront pricing and could save you hundreds to thousands in charges if you are paying out of pocket. They even have a mobile app you can use. My own costs for similar procedures in the same metro area with different hospitals differed greatly.

If you have insurance, call your insurance company to find out why they did not pay any outstanding items. If you have met your deductible already and have a large bill, take the time to find out what their appeal process is for medical claims. Most of the time all you need to do is submit a letter explaining why you are expecting them to pay. This should be inside your Explanation of Benefits (EOB). Remember the denial is just a first out the door no to you. Most of the time insurance companies do not want the hassle of complaints filed against them and will do the right thing and pay the bill.

Often I have received a bill that had no itemized invoice. I am unsure why they think it is okay to send a bill like this. Call them and let them know you want the bill itemized. You want to know every single detail. Don’t be surprised when you receive that bill there are numerous items you never thought you would be charged for. Call or write to them and dispute every single item with that institute. If the individual charges are ridiculously priced let them know. Remember this bill is just a first request for payment. They get told no by insurance companies, why shouldn’t they hear it from you?

If you have had no luck with the insurance company or you just don’t have insurance, you are automatically paying more for the same services than someone with insurance is paying. One of the big problems with health care in America is the medical institute must throw a big bill at the insurance company to get them to pay a small bill. Sometimes what they charge is 2 to 3 times as much to get that small amount. After reviewing the bill you receive from the medical institute be prepared to send them a letter asking for a reduction of the bill to mirror what an insurance company would pay.

There are always discounts if you ask for them. I myself have often gotten a discount (20%) by agreeing to pay the same day when I call the medical institute. If the medical institute has been nonresponsive to your request or still has not given you a price you can afford, then there are medical billing advocates. The people know medical coding and will get your bill down and only request you pay them a percentage of what you had to pay the institute. Don’t hesitate to contact one of these if you are experiencing unusually large medical bills.

A lot of times all of this may seem intimidating. You may feel lost and feel like you need outside help. If you fear that medical bills are going to ruin your credit please contact us as soon as possible. We would rather assist you when things are early in the game instead of when the bill has been passed on to a debt collector. If you already have a medical bill on your credit report, it’s even more important to do a free credit analysis with us.

Don’t forget to check out one of our other articles related to debt collectors being licensed in your state.

Does a debt collector have to be licensed in my state?

Debt Collector

We would first like to mention one should always try to pay their debts. We also feel it is your best interest credit report wise and for your reputation to pay the originator of the debt. This is best for your credit report, credit score and general reputation. Still, there are many times that debt is unqualified, unfair, unverified, invalidated, created under false pretenses such as no upfront pricing or you just can’t pay it. What are your options after that? Let’s be realistic—no one has the time or money to take every bad customer experience to the court.

If a debt collector is from your state, he has much more options to address this debt if you were not to pay. He may even choose to take you to court. Always take more caution with debt collectors in your state. They can begin to raise the price of what you allegedly owe. Our advice with in-state debt collectors is to never throw the letter off to the side (or any debt collector). Our advice is to respond immediately to ask for proof of license, verification of the debt or a reason and proof why you do owe the debt. Responding to the debt collector immediately is always in your best interest.

Some have often attempted to say that the Fair Debt Collection Practices Act does not require them to provide verification of debts after their first letter. This is not true, always demand verification and state you can and will not pay until the said debt is verified. If he can’t verify it with you, how could he do it in a court of law? If the debt collector refuses to provide validation or verification of the debt, send him a letter denying him payment based on that.

You should always require the debt collector to prove the debt is yours. You should also ask for a copy of his license to collect debts in your state. If the debt collector does not have one then he may not legally collect debts in the state of Utah. If he is from out of state, he will most likely not have a license for the state of Utah. Sadly in Utah, the requirements to be a debt collector are rather low but licensure is still a requirement. In some other states, the requirements might be even lower. Our custom template letter for out of state debt collectors can be located here.

After asking to see the license and the debt collector fails to respond with a copy of his license, you should mail a letter to him denying him his right to collect the debt. Place a limit on the number of days in the letter and tell him to cease contact with the credit bureaus about this debt. Also, place language in the letter if he continues you will turn him over to your state’s district attorney and consumer protection group if he does not cease. Keep a copy of this letter in your records to show the credit bureaus or courts if the debt collector continues to pursue the issue. We advise never to threaten to sue unless you actually plan on doing it. The same goes for threatening to turn debt collectors into agencies if you do not plan to. We also advise sending all letters to debt collectors in your state with certified mail. This shows you are keeping an accurate record of communication with this entity. Once, a step further could also be a log of debt collector interaction. You want to keep track of how they interact with you in case they are violating the law.

Template letters can be found at the Consumer Finance Protection Bureau . Utah Courts also has some advice on how to handle debt collectors. If you don’t understand these letters, or ever feel overwhelmed by debt collectors contacting you or confusion about how this affects your credit report, don’t hesitate to contact us at Wasatch Smart Finance. We will come up with a plan to handle them, along with a plan for repairing your credit. While you’re here check the article on how to pick the best credit repair firm.