In her Red Bud, Ill. kitchen Nancy Jordan sifts through collection notices.
“I don’t know what to do,” said Jordan.
She has thousands of dollars in medical debt collection after her husband had a scare with cancer. He’s now cancer free, but the bills keep coming.
Two of the bills were turned over to collection agencies. She tried to work out a payment plan, but it’s not going well.
“I offered $25 a month, (the debt collector) said 'that's fine, we will deduct but that's not going to stop us from garnishing his wages” said Jordan.
According to Thomas Nitzsche of the nonprofit credit counseling agency Money Management International, a debt collector can garnish wages, but not right away and not for all your income.
“If you are on Social Security or disability they cannot garnish that type of income,” said Nitzsche.
That means Jordan’s Social Security check is safe and so is her husband's paycheck - at least for now.
Nitzsche says it can't be garnished unless the collection agency gets a court judgment against you.
He explained that “if they issue you a summons you do need to show up and explain the situation because you don’t want to end with a default judgment just because you did not show up.”
News 4 continues to dig into the practice of selling medical debt. Hospitals sell it to third-party debt collectors often for pennies on the dollar. That's how KMOV, working in conjunction with RIP Medical Debt was able to obtain just over $1 million worth of medical bills currently in collections in the St. Louis area for only $12,500.
Even if you were not one of the 512 people in the St. Louis area to receive a letter from RIP Medical Debt stating your debt is forgiven, Nitzsche says you can still try to work out a lower settlement with a debt collector.
“Basically you save up money over time until you have enough saved up, say 30 percent of what’s owed. Reach out to the collection agency say I just got some money or I have money now, I can pay you “X” amount, if we consider that paid in full,” explained Nitzsche.
Nitzsche advises only using your credit card to pay off medical debt as a last resort.
But for the most part, medical debt is kept at a 0 percent interest rate, while credit card charges end up costing you more in the long run.
If you received a letter from RIP Medical Debt forgiving your debt, please email us at firstname.lastname@example.org or call 314-444-3370.
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