Debt Recovery

Oregon has its own set of laws that govern debt collection practices in addition to federal laws like the HIPAA and Fair Debt Collection Practices Act (FDCPA). Debt collectors are required to be licensed in the state of Oregon. Debt collectors in Oregon must provide a written notice, including the amount of the debt, the name of the creditor, and an explanation that the consumer has 30 days to dispute the debt.

You can select between a fixed fee service or a contingency-only service.

If a creditor has successfully sued and obtained a judgment against a debtor, Oregon law limits how much of a debtor’s wages can be garnished. The limit is generally 25% of disposable earnings or the amount by which a debtor’s weekly income exceeds 40 times the minimum wage, whichever is less. Certain types of income are exempt from garnishment, like Social Security, retirement benefits, and public assistance.

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In Oregon, there is a statute of limitations on how long a creditor has to sue a debtor to collect a debt. The statute of limitations for written contracts (like credit card agreements) is six years; for oral contracts, it’s six years. This starts from the date of the last activity or payment.

The Current State of Medical Debt in Oregon

The last thing you want to be worried about during an unexpected illness or injury is the cost of your medical bills. For those with steady jobs and good health insurance, typically, this is not a major problem. However, all too often, people have to pay thousands of dollars, drowning them in debt.

This is a very common issue for patients, but it also affects Oregon health professionals. Their focus is to treat their patients as effectively as possible, but doctors are often put in a sticky spot if their patients are not up to date on their medical bills. This is an issue throughout the United States, but in Oregon, lawmakers are taking steps to ease the strain of medical debt on patients. This is how they’re making a change and what it means for medical professionals in Oregon.

What Are the Current Rules for Collecting Medical Debt in Oregon?

As of right now, federal law prohibits debt collectors from harassing people. This means they are not allowed to contact people before 8 AM or after 9 PM. However, this law was passed in 1977, and technology has opened up a whole new world of ways to contact people. Current federal laws are being discussed to update these rules to accommodate the new technological advances. With the discussion sparked by Washington D.C., some states are taking steps to address medical debt specifically.

Oregon has a bill being discussed that would cap the amount of interest that can be charged on medical debt and requires hospitals to screen patients and let them know if they are eligible for financial assistance and insurance. This bill also requires non-profit hospitals and affiliated clinics to provide care for free for families with incomes of up to 200% of the poverty level and charge a lower amount for families earning up to 400% of the poverty level. This assistance would open doors for lower-income families that would keep people from going into debt or filing for bankruptcy due to their medical bills.

How Can Oregon Medical Professionals and Hospitals Handle Medical Debt?

All of this is incredibly promising for residents of Oregon. However, medical professionals will still have to handle medical debt for their patients in a way that preserves the trust and respect their patients expect from doctors. There are a few different ways medical professionals can do this:

1. You can discuss options for financial assistance and let your patients know what resources they might be eligible for to help with their debt.
2. You can let them know that there are payment plan options that will help them pay down their debt in manageable increments.
3. You can walk them through their bill so they understand all the charges.

By offering assistance to those who need it and being willing to discuss the charges in a way that your patient can understand, you’ll be able to address the issue of medical debt without costing you your rapport with your patients.

Once you approach a Collection Agency, they will

• Have you signup a contract after explaining all their services.
• Setup your preferences such as Mode of Payment/remittance for the amount collected ( send you a check or direct deposit in your bank account).
• Do you want accounts to be reported to Credit Bureaus or not.
• After unsuccessful contacts, should they transfer unpaid accounts to their next service automatically or not.
• Finally provide you the email and phone number of Client Support if needed.

When an unpaid debt is assigned to a Collection Agency, they will run the following checks on each account assigned (regardless of the service selected):

a) Bankruptcy Scrub: To check if the debtor has been legally discharged of his debts by a court.

b) Address Scrub ( or Skip Tracking): To find out the latest address and the phone number of the debtor.

c) Statute of Limitations check: A debtor cannot be sued in court after certain number of years. This varies from 3 to 10 years depending on which state the debtor resides. Most agencies will not attempt collections on on these time barred debts.

d) Litigious debtor check: This check is done by very few agencies, wherein they check if a debtor has a history of filing lawsuits. They either do not attempt collections on these accounts, or suggest an alternative approach.

e) Debt dispute period: Debtor has about 30 days to dispute a debt after the first contact is made by the collection agency. If a debtor indeed disputes the debt, the client/creditor must provide the statement / invoice /signed contract which proves the validity of debt so that collection activity can proceed. One should not even think of assigning an account for collections if backup documentation is not available.

Next, depending they type is service enrolled, different things can happen.

1. Collection Letters Service (Fixed Fees Service)

A creditor typically purchases accounts (for roughly $15 per account) from the collection agency. There is no other collection fees charged from the client beyond this flat-fees. Debtor pays the client/creditor directly. A collection agency will send up to 5 demand letters and verbiage of these letters start from “diplomatic/amicable” to slightly intensive with every passing letter. Verbiage can also vary depending on the industry of client (small business debt, medical debt, dental debt, bank debt or insurance debt). Client must notify the Collection Agency if a payment is received so that further demand letters are stopped.

2. Collection Calls Service (Contingency Fees)

Collection agency will typically do an “advanced” skip tracing to locate the debtor more accurately. Whatever is collected, a Collection agency keeps a percentage ( typically 35%-45%) of the money recovered. No recovery means no fees. Debt collectors will try to collect 100% of the amount due in full in “one-go” or by putting debtor in an “installment plan”. They may also report the unpaid debt to Credit Bureaus if collection efforts fail. They will call the debtor multiple times in accordance to the FDCPA debt collection laws. Good debt collectors are able to handle debtor excuses very well and know how to talk around those excuses. They are expert at the art of collecting debt, after all that is what the collectors do all day long.

3. Legal Collections ( Contingency Fees)

Typically, no more than 5% of all accounts assigned ever make it to the legal collections. A collection agency will inform  the client/creditor before transferring this account for legal collections or make this a part of your contractual agreement. They may attempt to garnish debtor’s wages, attach assets or put lien on the debtor’s house while attempting to get a favorable judgment. Collection agency may even try to add the lawyer fees on top of the amount owed, but it is up to the judge to accept it or not.

Hope this gives you a fairly good idea on how a Collection Agency works.

If you are looking for a cost-effective collection agency Contact us and we will connect you to a good one based on your requirements and industry.

In Minnesota, all collection agencies are required to be licensed. They must apply for a license with the Minnesota Department of Commerce and follow the guidelines and regulations set by the state. This includes agencies that are based out-of-state but collect debts in Minnesota.

Minnesota Fair Debt Collection Practices Act (MnFDCPA): Minnesota has its version of the Fair Debt Collection Practices Act, which mirrors federal law but also provides additional consumer protections. Collection agencies, including those that collect medical debts, must follow these laws.

Bonding: Medical collection agencies are also required to be bonded. This bond protects consumers if the collection agency fails to comply with state laws.

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Minnesota has specific rules related to medical debt. For example, hospitals must offer charity care to certain low-income patients and screen patients for eligibility for public programs before pursuing aggressive collection actions.

Medical debt collectors must comply with the Health Insurance Portability and Accountability Act (HIPAA), which protects patients’ sensitive health information.

Medical debt can be crushing, and it’s a major topic in the US today as citizens across the US struggle to maintain their financial security amid rising healthcare costs. Because doctors are the healthcare professionals that average people interact with most often, they usually have to deal with the frustration and anger that comes with the high cost of medical bills.

This issue is just as prevalent in Minnesota as anywhere else, and there are constant struggles from those living in Minnesota to cover unexpected healthcare costs. Accordingly, the state has passed some laws and regulations designed to manage these new healthcare based problems. They are subject to change but as of this moment, this is the state of Minnesota medical debt collection.

The State of Healthcare in Minnesota

The topic of medical debt collection is one that Minnesota legislators take seriously. The state has an agreement with medical providers and hospitals requiring them to charge a fair price for healthcare services. They are also not allowed to be aggressive in their attempts to collect on unpaid medical bills and debt. According to the current agreement, underinsured and uninsured patients who make less than $125,000 per year will receive discounts on their medical bills that have been negotiated by the insurance companies directly with the hospitals. This means that medical bills are less expensive than they might seem and that residents can get between 40 and 60% of their medical bills forgiven.

Rules about Medical Debt Collection in Minnesota

The purpose of Minnesota’s debt collection laws and rules is to protect the rights of those who are in debt. Just because a person is not current on their payments does not mean they are now subject to harassment. The laws outline several different rules that collectors have to adhere to. For instance, hospitals, medical providers, and debt collection agencies cannot file judgments against patients. They have to stop collection efforts until they have established a collection process that meets these guidelines, and hospital administrators have to review patient records before they file a lawsuit against patients to ensure the insurance companies have been billed properly. They also have to offer assistance in the form of payment plans or free or discounted health care to assist them with paying their bills.

How Doctors Can Handle Medical Collection in Minnesota

Although Minnesota has some of the best healthcare resources in America, there will always be unexpected costs that cause people to go into medical debt. There are a few options for working with patients to ensure their care is the first priority, but they are also addressing their debt.

1. Be willing to talk to patients. The medical billing process can be confusing, and being willing to discuss the charges and how they work is a great way to establish trust with your patients.
2. Suggest contacting their insurance provider. If there’s an outstanding bill to be paid, it’s possible that their insurance company has made an error or has ways to help that they could use to pay their medical debt.
3. Make sure your staff knows what resources they can offer. It’s important to educate your staff on what resources they can offer patients to help them pay down medical debt.

As a medical professional, your highest priority should always be your patient’s well-being. But realistically, the financial side of healthcare will always be there. Addressing it with your patients respectfully and discreetly will preserve their trust in you but still allow you to collect on medical debt.

Banks and credit unions make their money by lending, so delinquencies are inevitable even in the best economic environments. The figures vary, but as of 2023, the national delinquency rate for consumer loans is about 2.23 percent.

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Debt collection is necessary for banks and credit unions to recover loans and credits extended to borrowers who have defaulted or failed to adhere to the repayment terms. However, it’s important to note that debt collection should be carried out in an ethical manner, respecting the rights of borrowers and following the regulations set by relevant authorities. Here are some of the commonly used debt collection tactics by banks:

1. Initial Contact and Notification: The bank usually sends a notice to the borrower informing them of the default and the need to clear the outstanding debt.
2. Payment Reminders: Banks may send regular reminders via email, text, or calls. These reminders are usually polite and serve as a nudge for the borrower to fulfill their obligations.
3. Repayment Plan Negotiation: Banks often work with the borrower to come up with a revised repayment plan that is more manageable for the borrower’s financial situation.
4. In-House Collections: Before taking any legal action or outsourcing the collection process, many banks use their in-house collections department to attempt to collect the debt.
5. Credit Reporting: Banks may report the defaulted loan to credit bureaus, which could affect the borrower’s credit score. This is often a big incentive for the borrower to settle the debt.
6. Use of Collection Agencies: If internal efforts don’t succeed, the bank may hire a third-party collection agency to pursue the debt. These agencies specialize in debt collection and usually work on a commission basis.
7. Legal Action: As a last resort, the bank may initiate legal proceedings against the borrower to recover the debt. This can lead to a judgment and potentially wage garnishment or property liens.
8. Debt Settlement Offers: Sometimes banks might offer to settle the debt for a lesser amount than what is owed, especially if they believe that the borrower may not be able to pay the full amount.
9. Charge-Offs: If collection efforts have not succeeded within a certain period, the bank may write the debt off as a loss. This doesn’t relieve the borrower of the obligation to pay, but it means the bank has given up on collecting the debt as an asset.
10. Repossession: If the debt is secured, such as in the case of a car loan, the bank may repossess the collateral (such as the car) if the borrower defaults.
11. Communicating Through Authorized Channels: Banks should respect the borrowers’ preferences and legal requirements regarding communication channels (phone, email, etc.), time of contact, and language.

It’s important for banks to follow the rules and regulations set by governing bodies, such as the Fair Debt Collection Practices Act (FDCPA) in the United States, which outlines the legal and ethical boundaries in debt collection.

Collecting a debt is a complex process that interweaves law and strategy. Debt recovery is a vital part of all financial institutions as unpaid invoices can hinder business success.  Financial institutions must create strategies to manage a regular collections caseload.

Without a communication strategy, collection is impossible.

Many reasons can cause a customer to miss a payment. Part of the challenge is getting to know your customers’ financial struggles without bogging down your collection process. Communication is the best way to maintain a positive relationship with a customer that can weather financial struggles and lead to successful collection. There is an adage in collections that if you don’t call, you won’t collect; this holds true, especially for lenders and other financial institutions.

Strive to communicate frequently and proactively with customers. Encourage them to answer your calls and letters by adopting a collaborative tone. Be a resource for your delinquent borrowers by offering solutions. It’s a challenge, as debtors can easily enter a mindset of burying their heads in the sand. Show them a light at the end of the tunnel, and they may be more likely to work with you. Even if your communication efforts fall flat, at least you have maintained contact and can leverage the information you obtain from your calls to power more advanced collection efforts.

Use a pooled approach for maximum efficiency.

While it is crucial to maintain a positive relationship with your debtors, this nurtured relationship cannot be at the expense of efficient collections. Pooling collection resources is ideal because it reinforces consistency and leverages tools like a dialing system. The traditional method of financial institution collections involves assigning a dedicated agent. This traditional process has many benefits in nurturing a close relationship, but the efficiencies of a pooled approach offset these benefits. A pooled approach also forces a financial institution to operationalize a collection strategy — to make it uniform and regular.

Beyond uniformity and the ability to use a dialer, a pooled approach also has the advantage of data analytics. With all your collections resources aimed at a common goal and working on a common group of collection accounts.

Use collection tools and know the law

Creditors have numerous tools at their disposal for collections depending on the stage of the collection process. The overall goals are to obtain an agreement to pay the amounts due, or a portion, and fulfillment of the agreement. Collection tools that help reach these goals include the communication strategies we discussed but can also involve something unique to financial institutions — the right of offset.

Offset is when a financial institution can tap into deposits of a borrower to satisfy a debt. This practice has federal and state limitations, and financial institutions should become fluent in the applicable rules and regulations. For example, the Federal Reserve Board’s Regulation Z prohibits banks from using the right of offset for credit card debts. California state law stops a financial institution from depleting a debtor’s bank account to below $1,000. Other state laws protect certain deposited funds, such as disability, social security, or unemployment income.

Another tool is the use of credit reporting. Accurate credit reporting incentivizes payment and can be a tool to work with a delinquent borrower. For example, a financial institution should clearly communicate the ramifications of nonpayment and of entering a repayment agreement.

Engage the help of a collection agency for maximum results.

Banks, credit unions, and other financial institutions are in the business of investing and lending money. While collections is a component of banking operations, they can also distract and bog down operations. By hiring a collection agency, banks can more efficiently operationalize collections, reaping the benefits of the tips we discussed and more. Professional collectors can execute an organized and well-managed communication strategy, pool resources for efficiency and effectiveness, and know tools and legal strategies to maximize recovery.

Credit card debt is the largest category of collections for banks, but the other two major ones would be auto and home loans. Home loan collections are often handled by servicing companies – but also for all types of bank collections, there are at least 2 stages – collecting on a past due balance, then collecting on judgments and enforcing lines for secured debt. The four largest banks in the USA have 4 billion in credit card charge-offs – a huge number.

Contact us today for more information on how a professional collection agency can help your financial institution lower delinquency rates and increase collection revenue.

Almost 500,000 people go bankrupt each year because they cannot pay their medical bills. Maryland residents may face medical debt due to negligible personal savings, high healthcare costs, inadequate insurance coverage, and unexpected medical emergencies. Once a consumer falls behind in his payments, he quickly accumulates other unpaid bills. It is advisable to get paid before your patient’s condition deteriorates.

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It is worth noting that Maryland has a unique hospital rate-setting system known as the “All-Payer Model,” which has existed since the 1970s. Under this system, all payers – including Medicare, Medicaid, and private insurers – pay the same rate for hospital services, and this has historically been aimed at controlling healthcare costs in the state.

The Maryland Consumer Debt Collection Act provides recourse to Maryland consumers whose rights under the Act have been violated. Please be advised that the Act does not apply to any commercial transaction.

According to Maryland Consumer Rights Coalition, In 2018, approximately 10% of the population of Maryland was in poverty, and another 20% were in asset debt (unable to survive if they suddenly lost their income). Medical bills, one of the top 3 debtors in the United States, become difficult to collect when the vicious cycle of debt continues while the cost of living rises and wages remain stagnant.

Other than taking legal action in Maryland’s District Courts (for debts less than $6000) against debtors, other legal Maryland state-specific options can increase the chances that your bills will be paid. Options include sending bills to an internal debt collection office (for hospitals) or selling unpaid bills to external collection agencies who pursue payment using their own methods. Regulations under The Fair Debt Collections Practices Act (FDCPA), which controls the abilities of third-party debtors, apply to the state of Maryland as well. 

The statute of limitations in Maryland requires that lawsuits for unpaid debt be filed within three years from the last date of activity – leaving many medical professionals unable to take legal action if they wait too long or miss the date while focusing on other debt collection options. If you take legal action and the judge rules in your favor, wages may be garnished, assets and bank accounts seized, or even the assigning of Body Attachments to those who don’t appear in court. 

Many of the debt collection laws in the United States and in Maryland are outdated and inconsistent with modern-day wages, population, etc. Politicians such as state Sen. Will Smith have sought out legislation reform, which has remained unsuccessful until now. It’s important for all agencies and businesses, including hospitals and medical practices, to remain educated on the law and keep informed about any changes that may be set to occur. 

Families and citizens want to pay their bills, especially for necessities such as healthcare. Showing support and kindness towards patients and their financial situations may do better for collection debts than taking extreme measures. Communicating about fees and costs with patients prior to treatment or care, if possible, can help alleviate the surprise for these people when the bills arrive. If you haven’t incorporated payment plans and included late fees and penalties as part of the repayment process, it’s a good idea to consider it or to seek advice on the proper process for developing repayment plans.

If you’re having difficulty collecting medical debts, there are options and support to help guide you to making the right decisions. Reach out for a consultation now.

References:
http://www.marylandconsumers.org/penn_station/folders/about/annual_report/No_Exit_Report.pdf

Several factors contribute to the prevalence of medical debt in Tennessee, including high healthcare costs, a significant uninsured population, and the prevalence of chronic health conditions. Tennessee has historically had one of the highest rates of bankruptcy filings in the United States, and medical debt is often cited as one of the reasons for this. The state also has a high prevalence of chronic health conditions such as obesity, diabetes, and heart disease. A high percentage of medical professionals use collection agencies to recover medical bills that remain unpaid after two or more billing cycles.

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Rural hospitals in Tennessee have faced financial struggles, and several have closed in recent years. When local hospitals close, residents may have to travel farther for care, exacerbating financial difficulties and contributing to medical debt.

1. Tennessee Consumer Protection Act: This state law also has provisions that protect consumers from unfair or deceptive acts or practices in the conduct of any trade or commerce, including debt collection.
2. Statute of Limitations: In Tennessee, there is a statute of limitations on how long a creditor has to sue a debtor to collect a debt. The statute of limitations for medical debt in Tennessee is six years from the date the debt was incurred or the last payment was made.
3. Laws: Collection agencies must follow FDCPA, HIPAA, TCPA and other local laws when collecting the debt.

While most, if not all, people in the medical profession would like to focus solely on taking care of patients and helping people live better, healthier lives. Unfortunately, that is not the reality of the industry. The healthcare business is like any other business where you have to stay financially viable to continue doing what you love to do most. Healthcare businesses run into the problem of unpaid medical debt. When it comes to medical debt collection in Tennessee and elsewhere, you need to know the specific rules and regulations you face in your state. Here is everything you need to know about the Tennessee Medical Debt collection.

Medical Debt in Tennessee

The United States as a whole has a major problem with medical debt. Almost half of the adults in the country have medical bills that they are currently paying or, unfortunately, unpaid medical bills they cannot afford to pay. According to a 2016 study, an astonishing 60% of Americans have had to deplete a good portion of their savings at some point to pay medical bills. The problem with unpaid medical bills is most prevalent in the South/Southeast part of the country. And, while Tennessee does rank lower, with fewer people having unpaid medical bills than some of its regional neighbors, it still comfortably ranks in the top half of states for unpaid medical debt. Tennessee has about 1 million people in total with medical debt.

Tennessee Medical Collection Laws

The first thing to know about Tennessee medical debt collection is that when you are looking to collect a debt, you are accountable to all the same federal rules and regulations as any other debt collector. You can find more information about the federally mandated “dos” and “don’ts” of debt collecting on the Federal Trade Commission website and by reading the Federal Debt Collection Practices Act (FDCPA).

In Tennessee specifically, the law states that hospital bills are due 60 days after leaving the hospital and can be placed in collections by the owed business. There is a provision, however, that uninsured Tennesseans do not have to pay the full amount. Doctors and hospitals in Tennessee have been ignoring this law and trying to collect the full amount, leading to several lawyers planning class-action lawsuits.

Problems Faced by Doctors and Hospitals in Tennessee

Like many other parts of the country that are home to many rural towns and cities, rural areas of Tennessee are struggling to meet the healthcare needs of the people who live there. Many hospitals in these areas are struggling financially or closing their doors entirely. The Tennessean has a story about this that includes the fact that in some areas near the border of other states, the closest hospital is in the next state over. This causes all sorts of insurance and payment problems for both the patients and the medical debt collectors. One way medical companies deal with this is to open satellite health services offices to help replace closed hospitals.