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Discussion Starter #1
My daughter called tonight, distraught.
Backstory:
Her fiancé had surgery three years ago for a hernia. At the time they did not live together, he was an unemployed part-time student, living in his own apartment. He had no insurance, and the hospital assured him there were programs that he could apply to that would cover the surgery, and encouraged him to go ahead with it. He filled out all the paperwork, had the surgery, and never received any bills from either the doctor or hospital for it. He made the assumption, perhaps an extremely naive assumption, that his surgery was covered.

Last year he moved in with my daughter. They are in another state, but he had his mail forwarded, and has received mail from other places, including bills. Nothing whatsoever from the hospital, however. In the meantime, he completed a trade school program and graduated in Dec with HVAC and plumbing certification. He is actively seeking a job but not found one yet. My daughter works as an occupational therapist and pays to have him on her insurance plan. They manage to keep up with their bills, but barely. Once he gets a job, things will be better, and he is diligently trying to find employment.

Today, out of the blue, he got a letter from a collection agency seeking payment of $38,000 for the surgery. They called the hospital (twice, the first person she talked to promised to call her back and never did.) they were told that bills were sent - it is not their problem that they were never received. They were told that the hospital would only take the account back from the collection agency if he agreed to pay $900 a month. They also said that the amount could be reduced if he filled out paperwork to prove a low income and financial need. Most likely he will not qualify due to my daughter's income. The hospital is giving them until Jan 19 to agree to the $900. After that, they say they cannot take the account back from collections.

She has contacted an nonprofit agency that helps with debt problems. They will meet with someone on Friday. However, the person at the agency said they can only negotiate with the collection agency - if they manage to get the hospital to take the account back, they are on their own.

My daughter realizes that this will ruin their credit rating. They are getting married in June. She is afraid - realistically - that they will never be able to get a loan to buy a house.

If we could afford to help them, we would. But we are already paying her student loans, and paying for their wedding reception. It is rather modest, but still a significant expense. There is just no way these kids can pay $900 a month. She tried asking the hospital if they could work out something like $200 a month, and the people laughed at her...

I KNOW there are ways to fight this. To negotiate a reduction in the amount of the debt. To set up a smaller payment plan. We are all trying to find these resources. I know he was stupid and naive to have agreed to the fees before finding out whether he could get assistance. But he was pressured and reassured by the hospital that he would qualify. Now they are saying they have no record of any applications for financial assistance.

I feel so bad for them but it is ultimately their problem to resolve. I am frustrated and saddened, but also angry that the hospital did not try harder to contact him. He truly did not intentionally skip out on this bill...
 

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Discussion Starter #3
Thanks for the responses! I am sending all this to my daughter. I was wrong on the timing - the surgery was 2 years ago, near Thanksgiving 2010. In PA. He got one initial statement from the hospital which was accompanied by an application for financial assistance. He spoke with someone from the hospital who assured him he would qualify, he returned their paperwork, and never got another communication from them. He lived in that apartment for 6 more months, then when he moved his cousin took over the lease and saved any mail he got to give to him. They now live in CT. When they spoke to the hospital today they were told there is no record of any prior financial paperwork...

I have heard horror stories about these situations... I am just sick it is happening to them.
 

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Ten years ago I had a medical condition that amounted to thousands in treatments (app. $80K).  I had private insurance with limited coverage to keep premiums down.  I had some bills to pay myself.  (I had started the insurance plan just few months earlier and was worried they were going to call my condition pre-existing.  They didn't.  Whew!)  A collection agency was never involved so I don't know about that.  But as the article says which The Hooded Claw linked to above, don't make any payments by credit card.  I had been a legal secretary, so IIRC, though the attorneys I talked to worked in other areas, they both said as long as you make some (reasonable?) monthly payment to the hospital / medical service provider, they can't do much of anything.  Rightly or wrongly, once a collection agency is involved -- I don't really know.
 

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How awful.  I'm sorry to read this.
Two points: 
1.  I do not think that they can do anything to collect through your daughter.  They were not legally married and their assets were not joint assets at the time of his surgery.  Her income should not count.  I would definitely, for the time being keep everything in separate names until this is resolved; being careful not to add any community property to the mix.

2.  You may want to scour the web re:  Suze Orman... I remember either a book or a TV segment where she mentions something about if you tell a collection agency to stop harassing via a certain procedure (there was a process) and they continue to do so there are legal ramifications... some sort of loophole that works in your future son in law's favor.  I will try to look for the particulars; I wish I could remember...it was quite some time ago.

Also; he may have a case being that he was "pressured" and "felt threatened" to agree to payments.  He could honestly claim that he was under duress in making that decision.

BEST OF LUCK...
I held off on hitting post until I found the item:  It is a book about keeping your money
Suze Orman's 2009 Action Plan
 

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Until your daughter marries him, none of this will affect her credit rating. None of her income counts towards anything that will prevent (or help) him getting loans, etc towards paying the bill...and quite possibly, as long as they never share joint credit--no credit cards with the both of them on the account, no utilities together, no cars own jointly, not a thing--she can probably protect her credit rating post-marriage, but it will make buying a house, etc, a bit more difficult if they need to rely on his income to qualify. But if there's a low income payment plan, he needs to check that out before they get married, and never mention her income. Only his matters at this point.

He might want to look into something like Care Credit as a way to cover the cost at reasonable rates, and if he can find a professional debt negotiator--someone who can get the total amount down to what the hospital would accept from an insurance company (which would be FAR less than $38K...I had an ER visit this summer than billed out at well over $20K and the insurance paid out less than $5K, to which the hospital agreed. They *will* take less when pressured by the right people.)

There's also strategic default...walk away from the debt. It'll hurt for 7 years, but after that it's gone (possibly only 4 more years...he needs to pull his credit report from all 3 agencies and see when it posted). For that he should consult a financial adviser, someone who can do the math and figure out the costs vs benefits of personal strategic default.
 

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I don't think CareCredit would be the answer.  CareCredit is GE Capital financing.  I'm quite certain the service provider has to offer CareCredit plans at the time of service, not after the fact.  I've paid for dental work in the past and currently with CareCredit.  I'm currently paying my oral surgeon on a 24 month interest free plan and dentist on a 12 month interest free plan.
 

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The problem with negotiating with the collection agency is as soon as he makes any kind of deal with them, he is in for the whole thing. He is probably better talking to a lawyer before he does anything. Is there a chance he kept a copy of the original paperwork to the hospital that they say they never got?
 

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Tam said:
My daughter called tonight, distraught.
Backstory:
Her fiancé had surgery three years ago for a hernia. At the time they did not live together, he was an unemployed part-time student, living in his own apartment. He had no insurance, and the hospital assured him there were programs that he could apply to that would cover the surgery, and encouraged him to go ahead with it. He filled out all the paperwork, had the surgery, and never received any bills from either the doctor or hospital for it. He made the assumption, perhaps an extremely naive assumption, that his surgery was covered.

Last year he moved in with my daughter. They are in another state, but he had his mail forwarded, and has received mail from other places, including bills. Nothing whatsoever from the hospital, however. In the meantime, he completed a trade school program and graduated in Dec with HVAC and plumbing certification. He is actively seeking a job but not found one yet. My daughter works as an occupational therapist and pays to have him on her insurance plan. They manage to keep up with their bills, but barely. Once he gets a job, things will be better, and he is diligently trying to find employment.

Today, out of the blue, he got a letter from a collection agency seeking payment of $38,000 for the surgery. They called the hospital (twice, the first person she talked to promised to call her back and never did.) they were told that bills were sent - it is not their problem that they were never received. They were told that the hospital would only take the account back from the collection agency if he agreed to pay $900 a month. They also said that the amount could be reduced if he filled out paperwork to prove a low income and financial need. Most likely he will not qualify due to my daughter's income. The hospital is giving them until Jan 19 to agree to the $900. After that, they say they cannot take the account back from collections.

She has contacted an nonprofit agency that helps with debt problems. They will meet with someone on Friday. However, the person at the agency said they can only negotiate with the collection agency - if they manage to get the hospital to take the account back, they are on their own.

My daughter realizes that this will ruin their credit rating. They are getting married in June. She is afraid - realistically - that they will never be able to get a loan to buy a house.

If we could afford to help them, we would. But we are already paying her student loans, and paying for their wedding reception. It is rather modest, but still a significant expense. There is just no way these kids can pay $900 a month. She tried asking the hospital if they could work out something like $200 a month, and the people laughed at her...

I KNOW there are ways to fight this. To negotiate a reduction in the amount of the debt. To set up a smaller payment plan. We are all trying to find these resources. I know he was stupid and naive to have agreed to the fees before finding out whether he could get assistance. But he was pressured and reassured by the hospital that he would qualify. Now they are saying they have no record of any applications for financial assistance.

I feel so bad for them but it is ultimately their problem to resolve. I am frustrated and saddened, but also angry that the hospital did not try harder to contact him. He truly did not intentionally skip out on this bill...
I haven't read all the comments, so someone may have suggested this. He should get legal advice. I suggest he look up the attorney general's office in his state. They usually have a consumer protection division that takes cases like this where something is unreasonable. They can't force the other party to settle, but can often straighten it out, plus they don't charge anything.
 

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My heart goes for you Tam. I don't know anything to deal with such situation. But it is scary that something like this can happen in a civilized and developed land of the free. Something is terribly wrong here...It's a nightmare.
 

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Discussion Starter #13
I appreciate all the helpful responses and expressions of kindness and concern. They talked to a manager at the hospital's billing department yesterday. He steered them to an online form to apply for reduction in charges based on financial need. It is the same form he filled out two years ago. Unfortunately he did not keep a copy. They said the manager was very cold - obviously thought he as being lied to. He told them several times that the form asks for CURRENT income of ALL household members. She is not going to include her income. He was paying his rent and food out of student loans then and was still getting those loans until his graduation. They have lived pretty frugally and his share of the rent could well have been covered by that money.They have never opened a joint bank account and both of their names are on the lease - but they are not married and she is not willing to have her information included. She says she will move out or even move home if she has to to clear this up.

He is very embarrassed and humiliated by this and worries that we will be angry with him. In our opinion his only mistake was in being too naive and trusting, and not keeping records. He was told the hernia surgery was an emergency and that he would definitely get financial aid for it. He returned all forms and did everything they asked. He was 23 years old at the time, uninsured, had not been receiving support of any kind (including advice) from his parents since he was 18. Considering the lack of helpful parenting he has experienced, he is actually a pretty ambitious and successful young man. His only big mistake was in getting arrested for underage drinking at the age of 16 (when his older brothers took him to a party and got him drunk.) His parents basically threw out the paperwork and never paid the fine - but told him they did and that he would be able to get his driver's licence at age 21. When he turned 21 he discovered that since the fine had never been paid, the time would have to start all over for him to wait out the time before he could get his driver's license. He paid the fine and managed to wait and finally get his license. His parents also got cell phone contracts using the names of their underage kids - more than once - and when those kids became adults they found their credit was messed up. Thankfully he was not the victim of that scam - his siblings that have the same first names of the parents had that done to them. It blows my mind that people could do that to their own children. Of course the kids did not file any charges - but maybe they should have... Needless to say his siblings have had some difficulties in their lives. Jay has managed to keep out of trouble and has furthered his education. He has been diligently looking for a job - at this point any job - and I am confident that will come for him.

I just feel so bad that they are dealing with this now.
 

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At this point, I'd still suggest a conference with an attorney (before signing anything?).  Check with the area bar association.  All / most have attorney referral services.  Probably could get some legal advice for nothing.
 

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Sandpiper said:
At this point, I'd still suggest a conference with an attorney (before signing anything?). Check with the area bar association. All / most have attorney referral services. Probably could get some legal advice for nothing.
I have to agree; before he inadvertently gets into another mess. I would anyway; just to be sure. Many lawyers offer free consultations.
He sounds like he has come a long way: Some kids problems ARE their parents!! Well he has you now...that's a good thing.
 

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Until they are married they are not part of the same household. That would be like insisting that I list my room-mates income on my documents.
 
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