Credit Repair

How should I pay off over $25,000 in medical collections and repair my horribly damaged credit?

I had surgery back in 2005. I didn't have insurance, so I applied for COBRA. When I asked when the policy would be active, the person taking my information told me she would backdate it to the beginning of THAT day. So, I went to my dr that day and he told me that I needed an ultrasound. The next day, after the ultrasound, I was told I needed to have surgery. A week later, I had the surgery. A month after the surgery, the insurance I got through COBRA sent me a letter telling me that my actual start date on the policy was the day AFTER I called, so they considered my problem to be a pre-existing condition and wouldn't cover the surgery. All the dr's bills went to collections where they have been sitting and ruining my credit. Is there anything I can do 2 yrs after the fact? Is there a way to fight the ins company? What's the best way to pay them off? I need to repair my credit as I am now looking for a house. I just want to get out of this mess I have put myself in.

Public Comments

1. If you want to buy a house you will have to pay off most if not all those collection accounts or pay a double digit interest rate. You could negotiate settlements with the collection agencies but NEVER pay one single dime until it is in writing.
2. I found a good link describing ways to improve your credit.
3. I would definitely look into your dealings with COBRA. There may be some way legally to get them to pay for your surgeries. If not its a little tricky. Even if you got 25,000 dollars and paid all the debts off it doesn't really improve your credit score that much. The more you investigate credit scoring the more you realize its really and unfair and very unregulated system. The federal government does have a site about credit and a list of credit repair agencies that are reputable. I think that would be something you should look into, BUT be aware a lot of debt repair companies are frauds so do your homework.
4. It sounds like your COBRA should have covered it. However, after 2 years, it may be too late to go back and fight it. I don't have enough information to know for certian, however. To repair your credit, probably the best thing to do is to contact your creditors (only one at a time) and offer a settlement. If you owe one creditor $5,000, they may be willing to accept $3,000 as payment in full. Or they may accept $300 a month for one year. - If a creditor does accept a settlement, do not pay anything until you get something in writting - Check your credit and see which creditors are reporting. Often times creditors will not report medical debts to the credit bureau (I had a similar situation to yours, but only one out of five debts were reporting). Make those debts your top priority. - Pay off a big debt before a small one. Bigger ones have a bigger incentive to take legal action (which is another major ding on your credit). - If you do reach a settlement, stick to it. Paying a single day late could end the entire deal. - For a debt that is 2-3 years old, you could pay 40-60% of the amount owed. Offer 30% at first. Then counteroffer their counteroffer. Remember, you do have a lot of negotiating power. You don't have to take what is first offered. There are some credit resoration companies that will help with this. For a nominal fee ($500 maybe), they will negotiate a settlement. Obviously, this will save a lot of time, but will cost you $500. You can save money if you do it yourself.
5. I went through a similar situation in 2003. My combined medical bills were $30,000. I too had no insurance. Through frequent communication with all bill holders, I managed to keep all of my bills between two different collection agencies. After making monthly payments to both companies for the past four years I came to a financial point where I could make a pay-off. I asked each company if they were willing to make me a deal if I paid them off. Both companies settled on an amount just less than half of what I owed them. At this time, I also requested that they report to the big three credit reporters that I had been making on time payments for x amount of months and that I had successfully paid the accounts in full. During the last four years, at the advice of my financial institution, I obtained a few credit cards. Using them wisely and keeping them paid off (DO NOT SPEND MONEY YOU DO NOT HAVE) looks fantastic on your credit report. Of course there is always the option of a medical bankruptcy... but I would not recommend it. That will be on your credit report longer and appear worse than if you're showing bills needing to be paid. Another thing I will add is that when applying for a house loan, be open with your lender. Go over your credit history with a fine toothed comb and explain that these bills were due to an unexpected medical situation. So... the secret to getting out of this "mess" is time. Keep trucking, keep paying and keep breathing. It might seem like forever while you are going through it, but when the day comes that they are payed off you'll look back and think, wow, that didn't take very long really. No longer than some short-term car loans. And your health is more valuable than a car ;) Good luck to you! You can do it! ((have you checked into a personal loan that would consolidate all of those medical bills into one? if you qualify, again, ask the creditors to cut you a "pay-off" deal of a fraction of what you owe))
6. I know several people who can help from debt settlement specialists, credit repair professionals, and dedicated loan officers. Check out the source website and their free evaluation form in order to be contacted. Good luck.