Thursday, September 11, 2014

Q&A: I Changed My Name, Will Debt Collectors Find Me?

Dear Mr. Edwards,

Nearly three years ago I had a visit to the emergency room. I was sick for almost a month before letting my soon-to-be husband convince me to be seen, or rather force me. I had no insurance and was very hesitant to go. He paid the required $250 at the hospital with his credit card, and they told him that that was all that was owed for the entire visit and that we would not be billed for anything. What liars. 

Eventually I received a letter of collection for $500. I still have not paid it, as I've been either out of work or working part time, and now I am unemployed with a baby at home. At the time of my ER visit, I had a different last name and different address. I have since married, moved twice, and changed my phone number. My question is, will they still be able to find me in the next few years before the statute of limitations in my state goes into effect? 

What's more, will they have access to my husband's bank account and property and the ability to garnish his wages or place liens on his possessions? I am just so scared to track down my bill because I am afraid the amount has tripled by now, and there is absolutely no way we can pay it. But I am also worried that they can ruin my husband who has worked so hard for what he has, though it isn't much. Should I wait it out or take a risk and track down the debt? Please advise.

Thank you again for all your help.
God bless you.

J


J, 

I can understand your trepidation to go hunting down this debt. Hopefully I can ease your mind a little bit about some of your concerns. I'm going to separate my answer into sections. This makes it easier for you and future readers with similar problems to navigate between topics. 

Can the collection agency find you with a new name and address?

Technically yes, the collection agency can find you. The most likely method they'd use would be to locate you via your credit report. Your credit report should contain both your maiden name and your married name. It also contains your Social Security number which you probably provided at the hospital when you checked in. Just for future reference, I see no reason to provide an ER with your Social Security number if you're uninsured. They have to treat you regardless of whether or not you "remember" your SSN. 

When the hospital turned your debt over to the collection agency, it also turned over any information it  had on you: your full name, your address, etc. The collection agency plugged this information into its credit reporting software and boom! The software matches your information to the appropriate credit record. 

Changing your name, address and phone number may make you harder to locate for an individual, but for a collection agency with access to your credit reports, locating you wouldn't be rocket science. As soon as you update your name and address with your credit card company (or any other lender with whom you have an account that appears on your credit report), the credit card company updates its system to reflect your new information. That new informations subsequently gets reported to the credit bureaus and added to your credit report--which the collector, as a legitimate creditor, can pull and review at any time.

Can the collection agency enforce your judgment against your husband?

With the exception of government creditors, no creditor has the right to attach liens to property, seize property, garnish wages or levy bank accounts without first suing the debtor and obtaining a civil judgment. In most cases, creditors can't enforce your judgment against your spouse. Unless your husband was sued, he doesn't get garnished/liened/levied. 

The exception to this rule occurs in community property states. Community property states hold both spouses equally liable for debt. Now listen up, this part is important: Even if you and your husband live in a community property state, he is only liable for debts you incurred while already married. Your hospital bill was incurred prior to your marriage. 

So breathe easy. No collection agency can garnish him, seize property from him or freeze his bank accounts. Be careful though. A collection agency with a judgment against you can do those things to you, and if you share joint ownership of bank accounts and property, your husband's assets may still be at risk. State laws vary concerning what joint assets judgment creditors can and cannot seize. Wish I could be of more help there, but I don't know which state you live in. 

Check both you and your husband's credit reports 

Regardless of what you decide to do from this point on, you need to pull your credit report from all three credit bureaus. You can do this for free once a year without having to give a credit card number if you pull your reports through AnnualCreditReport.com.

Another issue you need to face head on is the prospect that your husband may have sustained some credit damage from this fiasco. Legally, he was only your boyfriend at the time you visited the ER and he was not (and still isn't) on the hook for that debt. He is, however, the one that paid the $250. Given the backwards and just plain ineffective way that many hospitals handle billing practices, its a good idea for him to pull his credit reports when you pull yours--just as a precaution. Credit reporting and collection mistakes are quite common.

What to do if you already have a judgment

It's very possible that the collection agency has already sued you and obtained a judgment against you. Any outstanding judgments should show up in the "Public Records" section of your credit report. Since you don't have a job, you aren't in danger of wage garnishment, but judgments are generally enforceable for ten years (some states differ, but not by much). If you get a job before the judgment expires and the judgment creditor still has its eye on you, you could face garnishment. And, like I mentioned previously, joint assets may be at stake. 

Depending on whether or not your state has a time limit for contesting judgments, you may be able to file a motion requesting a hearing to expunge an existing judgment. You have grounds to request such a hearing for a variety of reasons (once again, all this varies by state) but regardless of your state you should be able to contest the judgment if you were not properly served with a summons (which you clearly weren't). 

Waiting out the statute of limitations for debt collection 

You mentioned that you are flying under the radar waiting for the statute of limitations to expire, but we need to make sure that you're waiting out the right statute of limitations. 

Your original state's SOL freezes as soon as you leave the state and the SOL generally begins anew when you move to a new state (There are some exceptions, but this is the way it usually works). Now, if the creditor isn't aware of the fact that you moved away from your original state, the SOL clock continues to run until it expires. Its safer, however, to go by the SOL in the state where you live. 

Keep in mind that the SOL only protects you if you use it. A collection agency can still file suit after the SOL expires. If you don't respond to the summons and use the expired SOL as an affirmative defense, you could end up with a judgment on your record for a debt that was supposed to be time-barred. 

The likelihood of a lawsuit

Want more good news? You aren't a very good candidate for a lawsuit and the collection agency, if its found you, probably already knows that. You don't have a job and your husband is immune to legal action. The only real concern would be any major assets in your name, such as a home or car, that a collection agency could attach a lien to. 

Don't quote me on this because collection agencies are often unpredictable, but I strongly doubt they'd bother to sue you over a $500 debt (and no, it probably hasn't grown to immense proportions like you fear. We'll get to that in a minute.). That's a downright piddly amount compared to what some people owe and likely isn't even worth their time. 

Interest Charges on Collection Accounts

It makes sense to worry about interest on most collection accounts, but not on hospital bills. The Fair Debt Collection Practices Act states the following: 
A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
Put simply, a collection agency cannot charge you interest on a debt unless a signed agreement between you and the original creditor gave the original creditor the right to charge interest. This refers primarily to credit card companies. Once a collection agency has the debt, it can continue charging interest and the debt skyrockets. 

The same isn't true of hospitals. They aren't creditors per se, they are businesses to whom you owe a single debt for a single service. They can charge whatever they want for their services (and often do) and so they have no need to charge interest to make a profit. If the hospital didn't charge interest, the collection agency can't either.

Additional Collection Agencies and Junk Debt Buyers

It would be nice if after a certain length of time a debt--and any liability attached to it--just vanished into thin air. Unfortunately, that doesn't happen. If the collection agency cannot convince you to pay, it will simply pass the debt on to another collection agency and the cycle continues. 

Keep in mind that after the statute of limitations in your new state expires, you'll have an airtight defense against any lawsuits you know about, but junk debt buyers are notorious for intentionally serving summons papers to the wrong address in an effort to procure a judgment in their favor by default--especially if the SOL has already expired. Be wary.

Also, the credit reporting period expires 7.5 years from the date of your hospital visit. When that happens, federal regulations prohibit collectors from reinserting the information. That doesn't mean, however, that junk debt buyers won't try to change the debts and add the collection back on your credit file long after the credit reporting period expires. I strongly recommend that you print out your current credit reports and keep your original hospital bills in the event you ever need to dispute the account if it shows up as zombie debt years down the road. 

If you have any other questions, don't hesitate to let me know. Just post them in the comments section of this post and I'll find them. 


Best of Luck,
Lee



1 comment:

  1. One thing if this ever got to court or you had any interest in paying it off is the charges must be reasonable, so an itemized list of all charges/items on the account would be something you'd want. There is a fairly large document to examine covering many defenses of hospital collection cases.
    http://www.illinoislegalaid.org/uploads/000933hosmanu2.pdf


    There are also services that review medical bills and negotiate them down for a piece of the savings.

    ReplyDelete