On October 26, 2020, Maria gave birth to a healthy 5-pound, 6-ounce baby girl. She lovingly called him Milagrita (little miracle), feeling blessed that this little newborn survived a high-risk pregnancy and two waves of the COVID-19 pandemic.
During her third trimester, Maria had started to experience recurring abdominal pain. Her doctor advised further lab tests and an ultrasound to rule out any abnormalities of the placenta. The first ultrasound came back negative, and when symptoms persisted, a targeted ultrasound was ordered. The tests came back negative. Less fortunately, Medicaid felt that the additional assessments were not medically necessary and did not pay for them. All told, the extra ultrasounds and prenatal care left Maria with $ 12,000 in debt to various medical providers. She had no idea what to do.
The first call came three weeks after Milagrita was born. The man looked professional and introduced himself and his commercial collection agency. Maria didn’t quite understand what he was saying, but she got the gist of it: he was asking her to pay all of his debt right away.
Maria tried to find the words in English to answer, but it turned out that it was not necessary. The moment she replied “I am not doing this” the agent said he was happy to transfer the call to another agent. As the new agent explained the situation in fluent Spanish, Maria grew more and more afraid. Her hands started to shake and she inadvertently dropped her phone, dropping the call. It wasn’t the worst thing that could happen, to be honest. At least she didn’t say anything on that initial call that could have been interpreted as an admission of fault or a promise to pay.
Maria received an average of two to three phone calls a day, although “it was like these debt calls were coming all the time – couldn’t they just give her a little fun with her baby?” She pleaded. The pandemic was entering a third wave and Maria was still out of work. Her husband returned to his roofing job, but his hours were only about half of what they were before the COVID-19 crisis. They had no savings and had to find a way to pay for rent, food, and diapers. It was a simple calculation: this medical debt had to wait.
Suddenly, the calls kept coming in. The officer listened as Maria described the ultrasound and Medicaid problem, then, without missing a beat or raising her voice, repeated the same demands for payment. The agent told Maria that the amount she owed would go up and that her credit score – which she didn’t have anyway – would be ruined if she didn’t pay, and that she could never get it again. credit.
Maria felt trapped by uncontrollable forces, and at the same time, she felt a deep shame for having drawn this to herself. “I felt I deserved it and couldn’t think of anything else,” Maria explained. “It was so disturbing, like the debt had become a new person living in my house.”
Maria is far from alone. The debt of 77 million people in the United States – one in three adults – has been left to private collection agencies, according to a 2018 ACLU report. Medical debt is by far the number one reason for hearing about it. a debt collector. RIP Medical Debt reports that 66% of all bankruptcies and 25% of credit card debt are related to medical debt.
Over 100,000 lawsuits are filed in Colorado each year by debt collection agencies; about half are medical. Colorado debt collectors do not have to pay the filing fee before serving a summons on the defendant. Debt buyers frequently sue for small amounts, ACLU reports, revealing 1,000 cases in 26 states, including Colorado, “in which civil court judges have issued arrest warrants against debtors , sometimes to collect amounts as low as $ 28 ”.
Although debtors’ prison was abolished in the United States in 1833, there is a big hole in the system: not answering an interrogation (detailed questions about a claim) or not appearing in court. can result in contempt of court – and result in a person in debt jail.
According to Pew Charitable Trusts, less than 10% of defendants are represented by a lawyer. Most cases result in a default judgment against the defendant, who is ordered to pay court fees and accrued interest, further increasing costs. Once the collection agency wins the lawsuit, it can garnish wages or bank accounts, seize cars or personal property, or place a lien on the defendant’s property.
Under pressure, Maria agreed to pay the collection agency $ 100 per month – Milagrita will be in college when the debt is paid off. Maria can’t help but wonder how something as intimate and personal as her prenatal care, founded on doctor-patient trust, ended up so rotten and impersonal in the hands of a debt collector without face.
The Colorado Fair Debt Collection Practice Act protects consumers. Too late, Maria learned that she had rights. She now knows she could have contacted a legal rights group, like Nolo, CCLP, or National Legal Aid.
Money Matters topics relate to compilations and reflections of Barbara Freeman’s extensive work with government and intergovernmental agencies and the nonprofit and private sectors on five continents. She is the Founder and CEO of LaMedichi, a nonprofit organization based in Roaring Fork Valley dedicated to empowering the unbanked and underbanked to achieve financial security. To reach her, email Barbara at [email protected].