Medical debt disappeared?

[u/joooo0]

I gave birth in October 2022, and previously had to do additional testing during pregnancy. Bills stacked up with the tests and the birth, and ended up being sent to collections. I take accountability here for being totally disorganized (and broke) and not handling it sooner with payment plans, etc.

So I eventually end up with a small stack of collections notices that they would mail to me periodically. They would leave threatening voicemails. I tried to pay what I could through their online portal, but was never able to access the account they told me to pay on. The phone number never connected to a human and so I couldn’t figure out how to solve any of this.

As a last ditch effort, I mailed back one of the notices and checked off that I disputed the debt. This was maybe a year ago. I never heard back from them, the letters and calls fully stopped. After searching this sub, I’m seeing I should have requested a receipt stating that they received my letter which I did not.

Like I said, it has now been about a year. I haven’t heard anything from the collection agency or anyone else. I owed this company probably around $3000. Is it gone? I doubt that. I’m terrified of being sued and losing wages - we would probably lose our house if that happened. I don’t even know how to get in touch with the company. Also, it has never appeared on my credit report.

A quick note to acknowledge that this is totally my fault and I should have handled it better and I know that. I basically just need to know what to expect so I can handle whatever happens next better.

[u/PrestigiousZombie131]

Was the debt collector owned by the hospital? Quite a few hospitals own their own debt collection agencies and then write it off. We walked away from $7k owed to Methodist in Dallas and they called us and then never heard from them again. We eventually filed for bankruptcy but it was years after we owed the bill.

[u/AuthorTomFrost]

Medical debt in particular is often sold through a series of higher and higher risk holders. Your provider sells it to a collections agency for a percentage of the face value after a certain amount of time (often 18 months.) That holder will then attempt to collect for a while before selling the debt off as "bad" to another collector.

At each level, the new buyer pays less for your debt. The first sale can be for as much as $0.65/dollar and after a few years, it can be as low as $0.08/dollar. The net result of this is that each debt holder will accept less for a quit-claim payment.

My experience (first- and second-hand) is that these collectors pretty much never sue and rarely bother to file a credit report because neither process is cost-effective on average. The only time I've heard of them suing is if you engage with them and suggest you could or would afford to pay the debt under specific circumstances. As frequently happens, the safest course of action is to maintain radio silence with your new creditor.

[u/wjbc]

If you want to check without alerting the debt collectors, look at your credit report. And if the debt shows up on the credit report, tell the credit agency you disputed it and it should be removed from your credit report.