I have what would be considered a relatively small debt of €350 from an MRI scan back in March of this year. I’m not able to pay as I’ve been unable to find a job but I heard that it’s not something that I should be concerned about as it’s a civil issue and the courts are not concerned about a small amount.
Fast forward to last week, some solicitors sent me a letter claiming that If no payment is made in 14 days, they would begin legal proceedings. I’ve heard it’s just meant to be threatening and rarely ends up in court however others say that you can have a ‘judgement’ made against you. What could it escalate to?
I don’t know about Europe, but in the states, “legal proceedings,” means, “collection.” Which essentially means your debt gets shuffled to a company who will ceaselessly pester you to pay up. And your credit rating takes a digger.
When all is said and done you could probably get away with never paying up, but then you’d probably also never get a decent interest rate on a new car either.
I’ve been told that lots of lending companies won’t even ding you with unpaid medical debt.
Not sure how true that is. But it makes sense if you’re a lending company. If the only issue an applicant has is not paying his medical bills but still makes good on mortgages and auto loans, it would be dumb to turn them down.
Pretty much the same here. They can get a County Court Judgement (CCJ) telling you to pay up and that will pretty much destroy your credit rating. They could send the bailiffs in and their fees would be added to the debt, doubling it at least.
The best solution is to write to them with an offer of a regular monthly payment.
I don’t have a single cent (living with family now) and I don’t want them to pay if it’s not an issue. I might just ignore it as someone who had a similar situation with an unpaid dental cost did. It’s not criminal so it’s unlikely the court here will jail me.
I’m not sure though it can destroy credit rating (please correct me if I’m wrong) as I was told that hospitals are not part of the credit bureau.
If €350 rather than $350 wasn’t a typo that would mean you are in one of 23 European countries rather than in the US. Obviously the answer to the OP depends on in which country you are in.
Then the relevant laws and penalties are going to entirely depend on which country this is we are talking about. Not sure how you expect proper advice without that crucial part.
In the US, at least, ignoring something like this is about the worst thing you can do. Instead, the usual advice is to talk to them. Again, in the US at least, they can forgive the debt or they can put you on a long-term payment plan, perhaps five bucks a month or so. Either way, your credit is not dinged.
Have you actually “refused” to pay the debt or have you just been ignoring it? Sounds like the latter.
Don’t ignore it. That’s the worst thing you can do.
Call the billing office that did the original scan (or call the collection agency) and explain your circumstances in a rational, grownup way. The collection people see/hear this stuff every single day. Don’t grovel or make excuses. Not being able to pay is not a character failing on your part. It happens to everyone, including millionaires, corporations, and even countries. They don’t have it in for you personally. They just want to be able to make the case closed.
Offer to pay $5 or $10 per week (don’t know how to make the Euro sign on my keyboard). Be forthcoming, understanding of THEIR position, civil, friendly… warm, even. These are just people doing a job. They don’t hate or judge you.
My late husband had hundreds of thousands of dollars of medical bills. Medicare paid for a lot, but not all. When there was a portion unpaid, he’d call the doctor’s office (or whoever) and explain that due to the condition that had caused the bills, he could not work, and they would have to accept what Medicare had paid so far, as there would not be any more payment from us. He was utterly charming, cordial, and maybe just 2% apologetic. He didn’t express any shame or embarrassment–just presented the facts. He was mostly successful.
The debt is sold to a collection agency who nags you forever and your credit rating takes a dive. People who already have horrible credit ratings don’t really have much to lose. This is why you are not going to be given anything other than emergency/life saving care unless you have insurance or you pay upfront.
As others have posted, it drops your credit rating. The view from up here in Canada is that Americans are anal about their credit score, possibly for good reason - it shows up as a factor in whether or not you get credit and what interest rate. It is used by landlords sometimes to decide whether you are a risk to rent to. It is sometimes used by employers to determine if you are responsible with money or too irresponsible to hire.
Like most scoring, it reduces complex situations to a simple number with no explanation of extenuating circumstances; perhaps “simplistic” is the better choice of word. If you plan to live your future subsistence life outside the economic system, then it does not matter. If you want a car, a house, credit cards, a place of your own, a nice job… try not to ignore it.
The other point is - “legal proceedings”" means likely that they take you to small claims court. The process is - go to small claims court, get a judgement for the debt and costs associated with you not paying it (i.e. court filing costs, etc.) With this judgment, now collection agencies can hound you - although some actually follow the US laws on not harassing debtors beyond certain limits, some don’t. If you ever plan to get married, see if the state law allows debt collectors to go after your spouse and communal property for the debt.
The first thing to do is to reply to their letter explaining your circumstances - you cannot pay, you don’t have the money. Show up in court proving that you tried to tell them they were wasting their time. Maybe that will help, maybe the judge won’t add on court costs. Then make yourself aware of the laws regulating debt collectors if they get a judgement.
If it were a really big debt, in the tens of thousands range., perhaps bankruptcy would help. here, it probably costs more and hurts your credit score more to go bankrupt.
This is extreme and not representative of the normal experience, but in some places, if it goes to court and you ignore that, you might end up in jail.
Keep this in mind: no one wants to go to court. No one. Please, don’t let it get that far. It doesn’t have to. This is not a personal vendetta against you. You owe a legitimate debt. Acknowledge that and talk to the collection agency or the original creditor about how you can fix that. YOU are in the wrong here. It’s up to you to make it right. It isn’t even about your credit rating. This is a relatively small sum of money. You sound young. You really don’t want to be worrying about this for months/years to come. Just step up and engage.
This seems bizarre simply because the cost of keeping a person in jail for a few days far exceeds what most of the people in the article owed, let alone the cost of court proceedings. Someone is taking the state taxpayers for a ride.
It’s not necessarily the case that it hurts your credit rating.
I believe it is the case in instances where the creditor has gone to court and has a judgment against you. But if they have not done that, and you’re disputing the charges, then it shouldn’t impact your credit rating. The part I’m not sure about is whether the rating agencies are not allowed to reflect this debt until there’s a judgment, or if they can reflect it but you then have the right to call up the credit rating agencies and inform them that you dispute it, at which point they’re required to remove it from your file.
And it’s unusual for a creditor to go to court over small amounts of money. It’s not at all cost effective for them. (Generally, the way these things work is that the original creditor sells the debt to the collection agency for a small percentage of the nominal amount. They’re expecting that few people will pay up but that they’ll hit a jackpot from those few which do. But going to court over it is not part of their business model.)
The above is all for the US however. It’s influenced by laws in place, which may be very different in Europe.
AIUI, events in your credit history fall off of your record after seven years. Back in ‘91 I had an ER bill that went to collections; I was still on my parents’ health insurance, which covered most of it, but dopey me didn’t understand that there was a copay I would have to pay. I’m sure that went on my credit history, but I never knew about it. The first time I needed to borrow money was in 1999, nine years later - and there were no complications/consequences for that loan.
This was in the US; things may be different in other countries.
The US does not have debtors prisons in theory. In reality it is possible to go to jail for an unpaid debt. Basically the lender will get a court judgement against you to pay up. The court, presumably, orders payments based on what they feel you are able to pay each month. If you still do not pay then you can be held in contempt of court and could possibly go to jail for that.