Summary: Follow this simple plan to get MediCredit collections off your back.
You’re having a perfectly nice day until you go to your mailbox and you find a letter waiting. You open it and discover that you have a notice from MediCredit Inc.
You check your phone to find they left you two voicemails as well. Welcome to the not-so-wonderful world of debt collections.
This can be a scary moment. But before you hit the panic button, let’s put together a quick action plan to help you deal with MediCredit.
What is MediCredit?
As the name implies, MediCredit collects debts for doctors’ offices, hospitals, and other healthcare providers. These companies use agencies like MediCredit to collect from customers who have not paid.
Why is MediCredit Contacting Me?
If you’ve received a letter and phone calls from MediCredit Inc., then they’ve either purchased your debt from a creditor or a creditor has hired them to collect from you.
Chances are if you’re reading this, you want to know what you can do now to resolve this issue
Here’s what you need to do.
1. Know Your Rights
The Fair Debt Collection Practices Act (FDCPA) spells out your rights. Here are some key points.
- A debt collector cannot call you before 8AM or after 9PM.
- A debt collector cannot call your place of employment.
- If you have a lawyer, the collector must communicate with your lawyer.
- A debt collector may not communicate with your friends or family members or tell them about your debts.
- Debt collectors cannot threaten to harm you, your reputation, or your property, or use profane language.
- Debt collectors must identify themselves and the company they represent. They cannot claim to be law enforcement or other officials.
- A debt collector cannot threaten you with imprisonment or seizure of assets.
For a full review of your rights under the FDCPA see this summary from the Consumer Financial Protection Bureau (CFPB).
2. Validate and Verify the Debt
A debt collector must supply the following information to you within five days of the first time they contact you.
- The amount you owe.
- The name of the creditor.
- A notice that you have 30 days to dispute the debt.
This is called debt validation and the information is usually contained in a debt validation letter.
If you do not dispute the debt within 30 days, it is presumed valid. Always dispute debts. To dispute the account you will send a debt verification letter. Send the debt collector a certified letter asking for the following.
- How much you owe.
- The name and address of the original creditor.
- Proof that you owe the debt.
- The date of the original debt.
- Proof that the collector has legal standing to pursue collection efforts in your state.
Remember the difference between a debt validation letter, which the collection agency sends to you, and a debt verification letter, which you send to them. Once you receive the debt validation letter you have 30 days to send your debt verification letter.
Always check the date of the debt against the statute of limitations in your state. If the statute of limitations has expired, the collector cannot pursue legal action against you. Remember that making a payment or acknowledging that the debt is yours can restart the statute of limitations.
If the collector cannot verify the debt they must cease contact with you and notify the credit bureaus that the debt is unverifiable and should be removed from your credit record.
Verify your debt EVEN if you know the debt is yours. Collection agencies are often unable to verify the debt, and must immediately stop their calls and remove your debt from your credit report.
3. Get MediCredit to Quit Calling
You could get as many as 15 calls per day, according to a Consumer Credit Card Market Report.
Follow these simple steps to stop MediCredit from calling you.
- Write a “stop contact” or “cease” letter telling them to stop contacting you.
- Make a copy for yourself and mail the original to MediCredit.
- To prove you sent the letter, send it by certified mail with “return receipt requested.”
Make sure you follow these exact steps.
If you do, the National Consumer Law Center states, “the collector can only acknowledge the letter and notify you about legal steps the collector may take.”
When you stop the phone calls, you get some breathing room. Remember that you still owe the debt, and the collector can take legal action.
Then you can tackle the next step.
4. Contest the Debt With the Credit Bureaus
If you believe that you do not owe the debt or that the collection agency has failed to validate the debt, you can file a dispute with the credit bureaus. You will need to dispute the account separately with each credit bureau.
Credit Reporting Bureau Mailing Addresses
|P.O. Box 740256 Atlanta, GA 30374-0256||P.O. Box 9701 Allen, TX 75013||P.O. Box 2000 Chester, PA 19016-2000|
You can also dispute it online:
The credit bureau must investigate and verify your debt. If they cannot, they must remove it from your credit record.
Remember that even if the debt is removed from your credit record, the collection agency can still pursue collection efforts.
5. Settle With A Pay For Delete Agreement
If the collection agency verifies the debt, a settlement is one way to resolve the situation.
Remember that debt collectors pay, on average, 4 cents for every dollar of debt that they buy. That gives you room to negotiate. A collector can accept less than you owe and still make a profit.
An article from U.S. News & World Report found that collection agencies will settle for between 40-60% of the balance – which could mean thousands of dollars saved.
You might offer 10% of your balance to see what they say.
They’ll probably ask for more, but don’t let them push you around. With a little negotiation, you can reach an agreement you’re comfortable with.
While a “pay-for-delete” agreement removes your debt record from your credit reports, it may not erase the “charge off” your original creditor reported on you.
A collection agency may agree to remove your account from your credit record if you settle your debt. This is called a “pay for delete” arrangement.
When you discuss a settlement, ask the collection agency representative if they will delete your record if you pay. Send a formal “pay for delete letter” to confirm the arrangement and ask for a written commitment.
Get Your FREE Pay for Delete Letter Template
After much testing, we have put written a great pay to delete letter you can use to get started.
Get Everything in Writing
Again, get everything in writing. You want MediCredit to confirm they will not report your information to any of the 3 credit bureaus.
Be very specific in your emails with MediCredit. Leave nothing to guess.
Remember, you’re paying for total removal from your credit report. Not just a mark which states this debt has been paid. But an actual delete – as in, it’s gone forever.
Once you settle on an amount, you’ll need to make the payment. MediCredit will not delete anything unless the payment has been received.
After 30 days, verify your credit report and confirm the entry has been removed. If the debt is still on your report, your copies of your initial request along with receipts of the certified mail will be your best recourse. You’ll need to continue to contact MediCredit until the entry is removed.
Remember that you cannot compel a credit bureau to remove a legitimate account from your record. It will be recorded as paid, but it may remain on your credit report for seven years from the date when the account first became delinquent.
A pay-for-delete arrangement is a gamble. It may not work, but it’s worth trying. If the settlement is accepted you will no longer have to deal with the collection agency, and that’s a big plus.
Will MediCredit Sue Me?
It is not uncommon for collections companies to file a lawsuit against you to collect the debt you owe.
If a collection company does file a lawsuit, you will need to respond to the lawsuit, or the judge may file a summary judgment against you. Read about other steps you should take in dealing with a lawsuit from a debt collector.
A judgment against you means you legally MUST pay back the money, and they could even take it directly out of your bank account.
Generally, if you are sued by a collection company it is cheaper for you to settle than hire an attorney to defend a lawsuit you probably will lose in the long run.
However, if you truly don’t owe them money and you’ve attempted to show documented reasons why this is the case, you may need to hire an attorney to defend yourself.
You Can Get Professional Help
There may be several areas of your life you could use a little extra help. Credit repair is one of those.
If you’ve tried the steps above and haven’t had any luck, or if you don’t want to deal with MediCredit Inc. on your own, there are professionals who can help you.
The credit repair industry has earned a terrible reputation, and you’ll have to look out for disreputable companies and credit repair scams. There are still some companies that are legitimate and helpful.
Get Professional Help
We analyzed 21 credit repair companies based on price, service, and results, and picked our top three choices.
Stop Calls from MediCredit and Start the Repair
Don’t let dealing with MediCredit ruin your day. You have the resources you can use to get this debt resolved. Once you take these steps, you’ll be able to defend your credit report and move on.