With each passing year, medical costs in the United States continue to skyrocket. Medical debt is the number one reason for bankruptcy in the US, and it is an area of an increasing amount of legislation.
But what happens if you didn’t pay these medical bills and they’ve gone to collection? There are both federal and local laws that cover this. If you are receiving calls from debt collectors for medical debts you believe may be false or inaccurate, you should reach out to a licensed credit repair company in Pennsylvania.
What Does Federal Law Say?
The key federal law at play here is what is known as FDCPA (Fair Debt Collection Practices Act). This law was written in the 1970s, and before it came into existence, the world of debt collection was filled with shady practices.
The FDCPA outlines how and when a debt collector may contact you, what they are allowed to say, and what lines they may not cross.
No Harassment
Debt collectors may not contact you outside the times of 8:00 AM to 9:00 PM. They also may not threaten you with bodily harm or arrest. If they threaten to file a lawsuit, they must follow through and cannot employ it as a scare tactic.
No Discussion of Your Debt With Anyone Except You
Debt collectors may not tell your friends or coworkers you owe money as a way to slander you or attempt to pressure you into paying. The one exception to this is your spouse, if you live in a community property state. Other than that, debt collectors may not discuss your debt with anyone other than you.
Pennsylvania Law and Statute of Limitations
The statute of limitations on debt in Pennsylvania is four years. This begins when you make your last payment or, if you have made no payments, when the debt was incurred. If the debt collector cannot collect a debt from you, they may decide to file a lawsuit in an attempt to collect the debt. If the statute of limitations has passed, they may not file suit.
Many people ignore their debts entirely, hoping that they will go away–this is the worst possible approach. If you fail to show up in court, the company will win by default for the full amount. This can have terrible consequences.
Once you lose a lawsuit, you have a legal obligation to pay. This is why so many people file for bankruptcy. However, in Pennsylvania, there is one bright spot. Pennsylvania state law prohibits wage garnishment outside of a few key areas, such as child support. Wage garnishment is not allowed for medical debts, meaning the money may not be forcefully taken from your paychecks.
That being said, there are other means of collecting. They can seize bank accounts and place liens on your personal property, including homes and autos. These liens must be paid when you sell the property in order for the title to be transferred, meaning the liens are paid before you see a single cent of the money.
Credit Repair: The Road to Financial Recovery
Thousands of Americans have medical debt lurking on their credit reports in the form of collections they may not even be aware of. Some of these debts are past the statute of limitations, or they’re so old they should have been deleted from the credit report. Getting these debts removed or revoked is a time-consuming and complicated process. Thankfully, reputable credit repair companies like The Phenix Group are here to help!
Our financial professionals and licensed attorneys will handle the guesswork and headache, so you can focus on your life instead of chasing bills and dealing with never-ending calls from creditors. By removing inaccuracies and old collections from your credit report, your credit score will rise, and you can be approved for more loans at better interest rates.
Want to know whether or not it’s bad to apply for credit cards? Check out our latest post!