Medical debt is a huge burden. Collections companies will go to extreme lengths to collect. But you have options to get rid of it. While our post touches on a medical debt giveaway, a more accessible solution is bankruptcy. You do not need to qualify and anyone can take advantage of this remedy.
John Oliver, comedian and host of HBO network's "Last Week Tonight," recently set a record for the largest one-time television giveaway (topping Oprah Winfrey's famous "you get a car, and you get a car, everybody gets a car!" bonanza from 2007) by forgiving $15 million in medical debt he had purchased as part of an expose on debt buyers.
Staggering data on debt
Oliver's research, shared during the broadcast, indicates that American households have more than $12 trillion in consumer debt, more than $436 billion of which is considered "seriously delinquent" by being over 90 days past due. The show shed light on the practice of debt buying, a subset of the multi-billion dollar debt collection industry, where sometimes shady businesses will purchase debt that has been written off or deemed noncollectable (usually for just pennies on the dollar), then use unscrupulous methods in an attempt to collect upon it. The industry is largely unregulated, and very little licensing or oversight is involved.
HBO gets in the debt buying business
Oliver himself was able to start his own debt buying company - which he named "Central Asset Recovery Professionals" (CARP, after the "bottom-feeding fish") entirely online by filing with the Mississippi Secretary of State's Business Services Division. No licensing or background check was required aside from basic filing fees and information.
After incorporating CARP, Oliver and his show were soon able to purchase a package of previously uncollected debt worth $15 million from a Texas company for only $60,000. The purchase included names, addresses, social security numbers and debt amounts for more than 9,000 people. In lieu of collecting upon the debt, Oliver chose to forgive it, and pledged to work with a company skilled at forgiving medical debt without tax consequences for the debtor.
Shocking collection techniques
The show detailed many harassing, immoral and ultimately illegal methods that some debt collectors will use when attempting to cash in on their purchased debt, including:
- Calling at all hours
- Using profane language and taunts
- Threatening repossession of cars, personal items or even homes that are unassociated with the original debt
- Encouraging debtors to commit suicide
- Impersonating government agencies
- Threatening debtors with arrest, incarceration or physical violence
- Filing frivolous lawsuits to revive otherwise uncollectable debt, thus turning it into what is known in the industry as "zombie debt"
- Calling friends, loved ones or employers of the debtor in an attempt to collect (one collector shown in a hidden camera video said he routinely calls the owner of the company where debtors work in an attempt to "shame" them into paying the debt)
One collector, in a voicemail message played during Oliver's broadcast, even threatened to arrest, kill and eat the debtor's dog if the debt wasn't paid.
It'd be nice if someone like John Oliver could forgive all of our debts, but that probably isn't going to happen. If you are struggling to pay your debt and not getting anywhere, it may be time to take the next step. Contact an experienced bankruptcy attorney in your area to learn how a Chapter 7 or Chapter 13 bankruptcy filing might give you relief from unmanageable debt and the opportunity for a fresh financial start.