Can I get mortgage with $10K worth med. debt on my credit?How can this affect credit? My credit range: 683-744

Question

I was admitted in a county hosp. for 2 wks in Feb 06 w/high fever & pulse.They kept going back & forth on different diagnosis.Most days I sat there w/ nothing going on.I was told that my stay would be on a sliding scale if I signed on to be used as a case study & have med students study me.I agreed since I did'nt have a job/ins. @ the time.I was released after multiple tests/scans.In Aug 07, I get a call from a lawyers office/collection agency saying I owe $10K for medical services provided.In the last 16+ months I have not recieved any bill/notice/letter informing me of any such debt neither from the hospital nor from the agency.I called the hospital's accounting dept & they said they do not work the accounts that have been forwarded to agencies.Hence, they don't have any records of how much I actually owe.I have let the agency know that I didn't recieve any bill/notice from them.They lied & said I send all notices back as return to sender.Why would I ever do that?What are my options?

Answer 1

With a score in the 683 to 744 there is a good chance that this 10K is not on your credit report, so getting a mortgage should not be much of an issue. You do need to get this straighted out because these things tend to show up on credit reports at the worst time(such as applying for a mortgage). So here are some things to think about as to the actual 10K debt. If you just got a call from the collection agency it might just be a matter of time before they put it on your report. Now, it does not matter what the collection agency says, so just because they said the notices were returned does not mean you automatically owe the debt.

First you need to send the collection agency a debt validation letter, by certified mail with return receipt. In the letter you need to request that they send you copies of the original invoices as well as any payments on your account. They can not just give you a statement that shows the balance, they must provide the detailed information. In the letter do not include your SSN anywhere. If they don't have your SSN, they can't put it on your credit report, if they somehow get it there is a chance that this will then appear. Until they respond to you, they are not allowed to take any further action or contact you again about the debt.

If it does show up on your report and they did not get back to you in 30 days, you can send a request to the credit reporting agency that they remove the listing because the collection agency did not validate the debt.

Answer 2

First off: ALL UNINSURED PEOPLE, if you get hospitalized, be sure to see the medicaid-medicare counselor before leaving the hospital. In many cases the government (USA) will pay a large portion of the bills depending on your income and assets at time.
Second off: Go online & order/pay for a 3 bureau merged & scored credit report. You can get a free report but it will not show all the info you need. A 3 bureau merged & scored credit report is often called a mortgage credit report. This is what all lenders will be looking at and should show all collection agency names, phone numbers, acct numbers & original creditors (Drs....).
Third off: Apply with the lender of your choice, if you go for an FHA Mortgage the lender cannot require you to pay any medical debts. On occassion some FHA underwriters and all convetional underwriter might require a collection to either be paid in full or have you make written arrangements with the agency to pay like $10.00 a month, but must be in writing and signed by both you and them. These decisions should not be made until you are approved or subject to. Ask for a commitment letter(Approval Letter) and do not pay any of the collections until then.
PS, you will get the best rate/fees from your local bank.

Answer 3

I agree with OC1999, Mink and Christie

I just wanted to add:
Original creditors on regular money debts do not have to give a full accounting of accounts - medical providers do not fall under that law, they MUST provide a FULL accounting when it is requested in writing.

You should request a full accounting from the hospital in writing, send it certified mail return receipt.
You should also go back to the hospital and speak to them about the debt. See if they will reduce the amount due. They also have lists of different charities that will help pay on the bills for low income, uninsured people, ask the hospital about it.

Answer 4

It is not correct that most mortgage companies will "dismiss medical". When you apply for a mortgage, they're going to see this collection on your credit report, and they're going to ask you about it. It may be held against you.

Personally, I would engage an attorney. Ten thousand dollars is a butt-load of money and if you're going to end up paying it, you need an itemization showing exactly what you're paying for. Even though the hospital has sent the bill to collection, they should still be able to provide you with an itemized statement of charges.

Answer 5

Is the 10K on your credit score? Because if you have a collection having that high of a credit score seems off. I would check to make sure that it is on there. If your credit score is 683-744 and you have 15-20% as a down payment I don't see why you couldn't get a mortgage.

Answer 6

You'll absolutely be able to get a mortgage.

Medical bills (esp emergency room bills) do not carry the same weight on a credit report than consumer accounts do.

If you do not have the collection agencies number, next time they call, insist they send you documentation of said debt. If they don't, they'll have a hard time making you pay it.

Is it possible someone is intercepting your mail? (spouse, children, roomate)

Answer 7

Yes, you can get a mortgage. Most lenders will dismiss medical. Also, it will negatively affect your credit yearly when the agencies report it.
You can write to the credit bureaus and dispute this and then the burden of proof falls onto the hospital. They have 30 days to prove that you do owe the monies, and if they do not, it falls off your credit report