Blog

Call Us312-704-0771

Chicago debt collection attorneys

Best Practices for Collecting Healthcare DebtsDebt from medical bills is one of the top causes of people filing for bankruptcy in the U.S. Unlike purchasing a home or vehicle, healthcare is often an urgent need, and patients must immediately decide whether they will go forward with medical treatment. As a healthcare provider, you do not want medical bills to add to your patients’ stress but may need to be aggressive if a patient has gone months without paying. Organizations such as the Healthcare Financial Management Association have guidelines on how to best handle debt collection from patients:

  1. Understanding Patients In Advance: A patient may have limited health insurance coverage or no health insurance. You may need to educate patients about the ways that they can obtain health insurance or apply for financial assistance. Be upfront about the cost of the appointment or service and whether you offer a payment plan for patients who cannot pay the bill in a lump sum.
  2. Clear Billing: The medical bill that you send to a patient should be easy to read and understand. Highlight the amount that the patient owes and the deadline by which you expect payment. Remind them of any payment plans that you offer and encourage them to contact you immediately if they have any questions or concerns.
  3. Communicate with Affiliates: You may work with business affiliates that also need payment for the services that they provided. You can confuse your patients if both you and an affiliate are sending separate bills with different guidelines and expectations. Coordinate with your affiliates so that you are consistent in your billing and debt collection practices. Make sure that your patients are not being billed twice for the same service.
  4. Early Intervention: Starting formal debt collection efforts may cause that patient to not use your practice in the future. Before you get to that point, reach out to the patient to ask about the overdue payments. Discuss ways that the patient may be able to afford the medical expenses. If the patient seems unwilling to cooperate, mention without threatening that you have the right to pursue legal enforcement of the debt but would rather settle the issue without resorting to that.

Contact a Chicago Debt Collection Lawyer

A patient may force you to use a debt collection agency or litigation if your attempts to work with him or her are unsuccessful. A Chicago debt collection attorney at Walinski & Associates, P.C., can advise you on your options for collecting on unpaid healthcare bills. To schedule a consultation, call 312-704-0771.

Source:

...

Illinois Considers Raising Homestead Exemption to $150KIllinois lawmakers have once again introduced legislation that would change creditor’s debt collection practices. A similar bill from last year failed to make it out of committee, but lawmakers have outlined several goals that they believe will protect debtors:

  • Requiring all court summons for a debt collection lawsuit to include a debtor’s “bill of rights”;
  • Reducing the time in which a creditor can revive a judgment against a debtor to five years;
  • Lowering the annual interest rate on debt judgments less than $25,000 to two percent; and
  • Raising the value of the exemptions that debtors can use to protect their assets from creditors.

The proposed change to the homestead exemption stands out because of the sizeable jump. The exemption would increase from $15,000 to $150,000 for an individual homeowner and $30,000 to $200,000 for a couple.

Homestead Exemption

A home is often the most valuable property that a person owns, which makes it important to debtors and creditors. Creditors could recover a large portion of the debt by forcing the debtor to sell the property, but the debtor wants to protect the equity he or she has in the property. Illinois’ homestead exemption allows a debtor to prevent creditors from selling a property as long as the debtor’s equity interest is below $15,000. The equity interest is calculated by subtracting what the debtor owes on the mortgage from the value of the property. Raising the homestead exemption would make it more difficult for creditors to sell a debtor’s home after a judgment lien.

...

Confusion When Collecting from Divorced CouplesA couple going through a divorce must divide their debts as well as their assets. Each spouse takes responsibility for paying off a portion of the marital debt, such as a:

  • Mortgage;
  • Credit card balance;
  • Personal loan; or
  • Medical bill.

Divorcees may mistakenly believe that they are not liable for the debts that their former spouse assumed. As a creditor, you are not bound by the terms of a divorce agreement and have the right to pursue repayment of the debt from either spouse after the divorce.

Loan Contract vs. Divorce Agreement

You can give a clear explanation to a debtor who argues that the debt belongs to his or her former spouse:

...

Collecting Debts from Unpaid Federal Employees During Government ShutdownThe federal government shutdown has affected hundreds of thousands of federal government employees who are either being furloughed or forced to work without pay. The employees have already missed paychecks and will continue to miss them as long as the shutdown continues. Without the pay, some employees may not make their regular debt payments. Creditors must decide how aggressive they want to be in collecting debts from federal employees while the shutdown is ongoing.

Working with Debtors

Several federal agencies have asked creditors to be lenient with federal employees who owe debts. Following previous government shutdowns, many federal employees have received back pay for what they should have earned during the shutdown. Assuming that the current shutdown ends soon, the employees could have enough money to make up for missed debt payments. Some creditors may modify their agreements with debtors, extending the length of time that the debtor has to repay the loan in exchange for increased interest or other fees. Though there is risk involved, creditors who show patience towards federal employees may still be able to receive the money owed to them while maintaining a good relationship with the debtors.

Taking Action

The current government shutdown is already the longest on record, and there is no certain sign of it ending soon. Creditors can be patient after one missed payment, but multiple missed payments mean that the debtor may be in default of the debt. When deciding how aggressive to be with a debtor, a creditor should consider whether the debtor:

...

Debt Buyers Less Restricted than Collection AgenciesDebt buyers and debt collection agencies may operate similarly, but there is an important difference between them. A creditor hires a debt collection agency to pursue debtors on its behalf. A debt buyer purchases the debt from the creditor, making it the new creditor. Still, governments often put debt buyers in the same category as collection agencies. Illinois law states that debt buyers are subject to the terms, conditions, and requirements of the Collection Agency Act, except in four instances:

  1. Surety Bonds: Debt buyers are not required to purchase and maintain surety bonds. Collection agencies must have surety bonds through an insurance company as guarantors for its clients. The bond will compensate the creditor if the collection agency fails to return the money it has collected. A debt buyer does not have client obligations.
  2. Trust Account: Debt buyers are not required to put the money they collect into a separate bank account, called a trust account. Collection agencies must hold the payments they receive in these accounts because the money is ultimately going to the creditors that hired them. Unlike collection agencies, debt buyers are not holding the debts for another party because they own the debts they are collecting.
  3. Lawsuit Requirements: A collection agency cannot consult an attorney about filing a lawsuit against a debtor without first notifying the creditor it is working for. The creditor has five days after receiving the notice to respond and deny permission to consult an attorney. As both the creditor and debt collector, a debt buyer does not need permission to file a lawsuit against a debtor.
  4. Assignment for Collection: The collection agency and creditor must create an assignment for collection contract, giving the agency the right to collect the debt in its own name. Once again, a debt buyer does not work for a client, meaning that it already has the authority to collect the debt.

Debt Buyer’s Rights

Debt buyers can profit from paying low prices to purchase old debts that creditors may have stopped pursuing. Even if the debtor does not repay the full value of the debt, the debt buyer may still receive several times the value of what it paid for the debt. Debt buyers also have the same right as creditors to take a noncompliant debtor to court. A Chicago debt collection attorney at Walinski & Associates, P.C., can help you legally enforce repayment by debtors. To schedule a consultation, call 312-704-0771.

Source:

...
Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
Back to Top