Understanding Your Rights Pertaining to Medical Debt
Medical debt can be incredibly daunting, whether it comes as a surprise or even if you anticipated it. However, it's crucial to remember that even while dealing with the stress and potential financial devastation, you have rights. Both federal law and often state regulations set forth these rights, providing you with several defenses and allowances concerning how you handle medical debts and how debt collectors can legally interact with you. This article will delve into the specifics of these laws and rights to help you navigate through this difficult financial situation.
Navigating Through the Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act (FDCPA) is the primary federal statute that protects consumers from abusive, deceptive, or unfair debt collection practices. Its provisions regulate the conduct of third-party debt collectors seeking to recover personal (mainly household, family, or personal) debts.
The law protects against multiple abusive tactics. For instance, collectors cannot call you excessively, use profane language, resort to threats of violence, falsely imply that you've committed a crime or that they are attorneys or government representatives, and they cannot falsely represent the amount you owe, amongst other restrictions.
Your Right to Truth in Lending
The Truth in Lending Act (TILA) is a federal law designed to protect consumers in their dealings with lenders and creditors. TILA applies to most types of consumer credit, including medical debt, requiring that lenders clearly disclose key terms of the lending arrangement and all costs.
The most crucial TILA right is the right to rescind certain credit transactions that involve a lien on a consumer's primary residence, transactions such as second mortgages and equity loans, within three days.
The Health Insurance Portability and Accountability Act (HIPAA) Rights
The privacy rules of HIPAA provide federal protections for personal health information held by covered entities. They give patients rights over their health information, including rights to examine and obtain a copy of their health records, and to request corrections.
If you have medical debts, this means that your healthcare providers, insurance companies, and their contracted debt collectors cannot disclose your medical information to anyone not involved in your care without your permission. This rule includes your past due medical bills.
Protection Under the Equal Credit Opportunity Act (ECOA)
The ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or because someone receives public assistance. Creditors may not use any of these factors to decide whether to provide you with credit or the terms under which credit is offered.
Bankruptcy Protection
If you're overwhelmed by medical debt and other obligations and you can't see any way out of your situation, filing for bankruptcy may be a final resort. Both chapters of personal bankruptcy, Chapter 7 and Chapter 13, can wipe out unsecured medical debts.
Right to an Accurate Credit Report
As a consumer, you have the right under the Fair Credit Reporting Act (FCRA) to dispute any inaccurate or unverifiable information on your credit report. That includes medical debts that you do not owe, that are for the wrong amounts, or that are incorrectly reported in some other way.
State Laws Regarding Medical Debt
Don't forget to research your state's laws regarding medical debt. Some states have their own laws that go beyond federal regulations to provide additional protections to residents. This may include shorter statutes of limitations for medical debts, restrictions on wage garnishments, or required written notice of debt.
Medical Debt Collection Process
The journey of medical debt from bill to collections starts at your doctor's office, where you incur a medical debt. If you have insurance, your doctor's office will submit a claim. If the insurance company does not fully cover the bill, you're responsible for the remaining balance. You'll generally have about 180 days (or around six months) before your doctor's office sends your debt to collections.
Once your medical debt is classified as delinquent, you have a 30-day window to dispute the debt. During that time, the collection agency can't contact you. If you request documentation or verification of the debt, the company must provide proof that the debt is yours.
Consumer Rights under the Consumer Financial Protection Bureau (CFPB)
The CFPB is a U.S. government agency that ensures banks, lenders, and other financial companies treat consumers fairly. Established in 2010, the CFPB has jurisdiction over banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, and other financial companies operating in the U.S.
Legal Actions Regarding Medical Debt
If your medical debt isn't resolved, it might lead to a lawsuit. The statute of limitations for medical debt varies from state to state, but typically it's around six years. Once this period expires, debt collectors cannot sue you to collect the debt.
The Community Reinvestment Act (CRA)
The CRA aims to meet the needs of low- and moderate-income neighborhoods and has been used by advocates to ensure access to basic banking services. In regard to medical debt, non-profit hospitals are required to provide a certain amount of community benefits, which can include forgiving medical debts.
Debt Settlement and Negotiation
Sometimes, you can negotiate your medical debt to a lower amount or manageable payment plan. This approach can prevent your debt from going into collections or stop it from negatively affecting your credit score.
Your Rights and Future Medical Debt
Understanding your rights is a crucial part of combating medical debt. However, you can also take steps to prevent future medical debts. Regularly reviewing medical bills for errors, understanding your health coverage, and keeping open lines of communication with healthcare providers can help avoid additional debt.
Dealing with Medical Debt: A Review of Rights
Withstanding the financial whirlwinds of medical debt isn't just about willingness and perseverance. Knowledge of your rights as a debtor will be your frontline defense. Keeping abreast of your FDCPA, TILA, HIPAA, ECOA, FCRA, and state rights, not to mention being aware of the complete debt cycle, will go a long way to maintaining your financial health. Furthermore, always remember that when dealing with such debt, legal defenses, professional advice, bankruptcy protections, and even debt reductions and settlement options are within your reach.
