Tag Archives: debt

Medical Debt , Your new Handcuffs

credit-report-killer-1-5-americans-unpaid-medical-debtAngelia Fowler was surprised to learn that the debt-collection agency she says is ruining her life is owned by the hospital company that saved it.

Fowler had been sick for months in November 2015 when her son finally took her to the emergency room with what turned out to be pneumonia. She spent much of the next month in a coma in intensive care at St. Mary’s Medical Center in West Palm Beach, Florida.

The bill arrived in January. After discounts, the hospital wanted her to pay $80,770. Other bills from specialists boosted the sum she owed above six figures, enough to buy a condo in West Palm Beach. It was a sum she couldn’t pay.

Millions of patients like Fowler are on the receiving end of the health-care industry’s collections machine. The amount of past-due medical debt in the U.S. is about $75 billion, spread among 43 million people, according to estimates from economists at MIT, Northwestern University and the University of Chicago. About half of all collections lines on credit reports are related to medical debt, a 2014 report (PDF) from the Consumer Financial Protection Bureau showed.

Fowler, who is uninsured and doesn’t qualify for Medicaid in Florida, lives off unemployment and help from her son, a chef. The bill from St. Mary’s went to a collections agency called Central Financial Control, which reported it to credit bureaus. Though Fowler attained a Master of Business Administration degree online this fall, she said three employers have declined to hire her because of the medical debt, a practice that’s legal in Florida and 38 other states.

“When you’re handed this type of debt because of health reasons, it is like a set of debt handcuffs,” said Fowler, who is now 60. “It throws your life off trajectory.”

Though Fowler didn’t realize it, St. Mary’s Medical Center and Central Financial Control are both owned by Tenet Healthcare Corp., the for-profit hospital operator. As Tenet and other hospital companies struggle to make money providing medical care, they are turning to the profitable and growing business of collecting debt.

Most hospitals have finance departments or outside companies that try to ensure they get paid by insurers and patients. But Tenet has gone a step further than most, turning its operation into a separate business line called Conifer and contracting its services to other medical providers.

Conifer serves the 77 hospitals Tenet operates. It also works for more than 700 others, including hospitals run by the nonprofit Catholic Health Initiatives, which owns a minority stake in the business. The collections agency that contacted Fowler, Central Financial Control, is the operating name of a Conifer subsidiary called Syndicated Office Systems LLC.

Conifer is one of the few bright spots at Tenet. The Dallas-based company is selling off hospitals to manage its $15 billion debt load. Even as Tenet has unloaded hospitals, it keeps them on as clients of Conifer, according to the company’s earnings presentation (PDF) last month. Acting Chief Executive Officer Ronald Rittenmeyer, during Tenet’s earnings call Nov. 7, said he plans to cut jobs at Conifer, which employed 15,570 people at the end of 2016.

While Conifer accounts for just 5 percent of Tenet’s revenue, it has an outsize influence on the company’s bottom line. Measured by earnings before interest, taxes, depreciation and amortization, Conifer’s margins have been roughly twice as large as those in Tenet’s hospital business. The parent company doesn’t directly report how much Conifer contributes to its net income.

Tenet and Conifer declined to make executives available for an interview. In an emailed statement, Ryan Lieber, a spokesman for St. Mary’s, said that Conifer “helps our patients understand and navigate the financial aspects” of their care, including applying for charity care and other financial help. The business has helped more than 25,000 St. Mary’s patients in the past two years, he said.

Fowler’s account “was never classified as a charity care case,” Lieber said. After Bloomberg asked about her situation, the hospital said it will reach out to her “to close out her account and resolve credit reporting issues.”

Other medical providers are in the collections business. HCA, the nation’s largest for-profit hospital chain, has a subsidiary called Parallon that boasts on its website about collecting $41 billion annually. MedNax Inc., a company that provides staffing to hospitals for such services as anesthesiology and neonatal intensive care, purchased a billing and collections company in 2015.

Medical providers got more sophisticated about billing and collections during the 1990s. That’s when insurers, under pressure to contain costs, became more restrictive about what medical services they would pay for. More recently, insurance policies have put more costs on patients. The average deductible for employer-sponsored coverage more than doubled in the past decade, to $1,505 for an individual. That means hospitals are increasingly chasing payments from individuals as well as insurers.

The business of making sure doctors and hospitals get paid—known in industry jargon as revenue-cycle management—is by one estimate a $24 billion market. Along with billing and collections, it includes verifying patients’ insurance, checking whether they’re eligible for government assistance and making sure the services that doctors provide are properly documented and billed.

Collecting payment has become more important as hospitals’ traditional revenue streams come under pressure. Looming cuts to Medicare reimbursements may make as many as 60 percent of U.S. hospitals unprofitable, compared with about 25 percent currently, according to a 2016 Congressional Budget Office analysis.

“The stakes are higher, the dollars are bigger and therefore, they simply can’t afford to not be good at this,” said Jim Lazarus, managing director at Advisory Board Co., a hospital consulting company.

Tenet’s practices have drawn backlash from patients and regulators for years. In June 2015, the Consumer Financial Protection Bureau ordered (PDF) Conifer to pay $5 million in relief to consumers. The regulator said it failed to send consumers proper documentation and didn’t adequately respond when debts were disputed.

The bureau has recorded 889 consumer complaints about Tenet since 2013, including 358 so far in 2017. Many don’t mention the hospital company directly but refer instead to Central Financial Control or Syndicated Office Systems. Among complaints about medical debt, only two collections agencies were cited more frequently than Tenet. None of Tenet’s for-profit hospital competitors have a similar record of complaints, although some of those companies outsource the work.

When Fowler was unable to meet her obligation, she appealed online to an organization called RIP Medical Debt, a nonprofit that buys debt on the secondary market and forgives it. It was founded by two former collections industry executives. The nonprofit identifies people who can’t pay their medical debts and then tries to raise money to buy the delinquent accounts for pennies on the dollar, forgiving the debt. The charity said it hasn’t yet taken up her account.

Fowler said the hospital never discussed charity care with her and that her attempts to set up a payment plan after she was discharged went nowhere.

“They said nothing to me. I just got this giant bill in the mail,” she said. “I’m very grateful that you saved my life. But does our health care have to decimate us financially? It’s destroying me.”

Free Tuition

stanfordStanford University will provide free tuition to parents of students who earn less than $125,000 per year — and if they make less than $65,000, they won’t have to contribute to room and board costs either.
Students are still expected to pay $5,000 toward college costs from summer earnings and working part-time while enrolled in college.
The announcement is an expansion of Stanford’s old financial aid policy, which previously applied to students from families making less than $100,000 per year.
Most universities can’t afford to offer such generous financial aid to their students. But they could draw a lesson from the plan’s simplicity.
How Stanford’s financial aid works;

If a student’s parents make less than $125,000 per year, and if they have assets of less than $300,000, excluding retirement accounts, the parents won’t be expected to pay anything toward their children’s Stanford tuition. Families with incomes lower than $65,000 won’t have to contribute to room and board, either.

Students themselves will have to pay up to $5,000 each year from summer earnings, savings, and part-time work. There’s no rule that parents can’t cover their students’ required contribution.

Stanford is much more generous toward middle-class and upper-middle class students than the federal government is. Most students who get subsidized loans and federal Pell Grants come from families making less than $60,000 per year. But it also enrolls an outsize proportion of wealthy students. In 2010, the university’s director of financial aid said the median family income at Stanford was around $125,000.

On the other hand, only 14 percent of entering freshmen got federal Pell Grants in 2012, which typically go to students from families making less than $50,000 per year. Nationally, 41 percent of undergrads received Pell Grants.

Why other colleges can’t do this — but what they can learn

Stanford enrolls a high proportion of wealthy students, who pay higher tuition that helps subsidize lower-income peers. And Stanford is one of the world’s richest universities, with an endowment of $21 billion.

On the other hand, there’s something that every college could emulate about Stanford’s policy: it’s incredibly simple and straightforward.

Middle-class students know even before they apply to Stanford what they’ll have to pay to attend, whether they’ll be able to afford it, and how much they’ll have to borrow. At most colleges, the amount a family is expected to pay doesn’t show up until after students have applied, been accepted, and filled out financial aid paperwork. That’s partly because many colleges are stretching their financial aid budgets and don’t know what they’re dealing with until students have been admitted.

But legislators are trying to make federal financial aid, at least, more transparent, by allowing students to use older tax data when filing the FAFSA. That would allow students to find out how much aid they qualify for up to a year before they start college. Researchers have proposed even earlier notification for students from poor families — letting them know as early as eighth grade that they could qualify for a federal Pell grant.

Most colleges can’t match Stanford’s generous financial aid commitment. But they could at least try to duplicate its simplicity.

Source: vox

Student Debt Rising

PIC07

MDC researched and discovered, The Consumer Federation of America (CFA) released a study Tuesday that found that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a 14 percent increase in defaults from a year earlier. The consumer watchdog used the latest data from the Education Department, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans. Failing to repay student loans has all sorts of terrible consequences, but in some states, more than just your financial well-being is at risk — student loan default could cost you your professional certification or even your driver’s license.

MDC highlights some career paths that could incur problems . Some states suspend licenses needed to practice in certain fields, from health care to cosmetology, though license suspension can extend to driving, too.

Repeal advocates argue that license suspension is a counterintuitive punishment for student loan defaulters, because it may keep them from working, which theoretically enables them to repay their debts.

According to a list from the National Consumer Law Center, 22 states have laws that enable suspension of state licenses issued to student loan defaulters. The professions and licenses affected by suspensions vary by state and cover a wide range of earning potential, but some of them include doctors, social workers, barbers, transportation professionals and lawyers — the lists can be quite extensive. If your state is on the list and you’re at risk of defaulting, you might want to research the details:

Alabama
Alaska
California
Florida
Georgia
Hawaii
Illinois
Iowa
Kentucky
Louisiana
Massachusetts
Minnesota
Mississippi
Montana
New Jersey
New Mexico
North Dakota
Oklahoma
Tennessee
Texas
Virginia
Washington

Student loan default trashes your credit, and the loans continue to incur interest and fees as long as they remain unpaid, so getting out of default can be very challenging. If you have federal student loans, as most people who borrow do, there are many options available to you before you’re 270 days past due on your student loan payments (that’s the definition of default): You can apply for income-based repayment or pay-as-you-earn programs, in addition to applying for an extended repayment period, which will raise the cost of your loans in the long run but make them more affordable now.

If you want to see how your student loans are affecting your credit, You can check your credit reports for free once a year from each of the three major credit reporting agencies at AnnualCreditReport.com. Because student loans are generally not dischargeable in bankruptcy and default can be catastrophic for your credit, it’s crucial to prioritize making your loan payments on time.

 

The Greek Debt 



MDC says, Greece has secured debt restructuring and medium-term financing. The deal with its creditors after seventeen hours of marathon talks with eurozone leaders will allow the country to stay in the eurozone. 

Greece will now have to rush legislation through parliament this week to to begin talks on a three-year loan.

“There are strict conditions to be met. The approval of several national parliaments, including the Greek parliament, is now needed for negotiations on an ESM programme to formally begin,” explained Donald Tusk, President of the European Council. “Nevertheless, the decision gives Greece a chance to get back on track with the support of European partners.

“Since the beginning of what’s been described as the “Greek case,” the [European]Commission never stopped to insist on the fact that we wouldn’t accept any kind of “Grexit.” There won’t be any “Grexit,” Jean Claude Junker, President of the European Commission, told reporters at a press conference after the talks.

The eurogroup president gave details of a privatisation fund of 50 billion euros to pay Greece’s debt.

“..and part of that agreement is that a fund will be set up which will … assets will be transferred to this fund, the fund will monetize these assets, either by privatizing or by running the assests and trying to make Jeroen Dijsselbloem. “That money will be used to deal with debt and to reduce debt. Also it will be used for repayment and recapitalization of banks.”

Analysts say Greece prime minister Alexis Tsipras has abandoned hope of the end to austerity he had promised Greeks when his Syriza party was elected in January.

Student Debt is an Anchor

Failing to repay student loans has all sorts of terrible consequences, but in some states, more than just your financial well-being is at risk — student loan default could cost you your professional certification or even your driver’s license.

Two state legislatures (Iowa and Montana) are considering bills that would repeal laws that allow states to suspend the driver’s licenses of student loan defaulters, Bloomberg reported in a March 25 piece on the topic. Even if those repeals succeed, several other states have such laws in place. Some states suspend licenses needed to practice in certain fields, from health care to cosmetology, though license suspension can extend to driving, too.

Repeal advocates argue that license suspension is a counterintuitive punishment for student loan defaulters, because it may keep them from working, which theoretically enables them to repay their debts. That’s the case Montana state Rep. Moffie Funk is making for the bill she introduced to repeal the state’s law that allows driver’s license suspension, Bloomberg reports.

According to a list from the National Consumer Law Center, 22 states have laws that enable suspension of state licenses issued to student loan defaulters. The professions and licenses affected by suspensions vary by state and cover a wide range of earning potential, but some of them include doctors, social workers, barbers, transportation professionals and lawyers — the lists can be quite extensive. If your state is on the list and you’re at risk of defaulting, you might want to research the details:

Alabama
Alaska
California
Florida
Georgia
Hawaii
Illinois
Iowa
Kentucky
Louisiana
Massachusetts
Minnesota
Mississippi
Montana
New Jersey
New Mexico
North Dakota
Oklahoma
Tennessee
Texas
Virginia
Washington

Student loan default trashes your credit, and the loans continue to incur interest and fees as long as they remain unpaid, so getting out of default can be very challenging. If you have federal student loans, as most people who borrow do, there are many options available to you before you’re 270 days past due on your student loan payments (that’s the definition of default): You can apply for income-based repayment or pay-as-you-earn programs, in addition to applying for an extended repayment period, which will raise the cost of your loans in the long run but make them more affordable now.

If you want to see how your student loans are affecting your credit, You can check your credit reports for free once a year from each of the three major credit reporting agencies at AnnualCreditReport.com.

MDC says, student loans are generally not dischargeable in bankruptcy and default can be catastrophic for your credit, it’s crucial to prioritize making your loan payments on time.

Dealing with Debt

Owing on balances you can’t afford is bad enough, so the last thing you need is a debt collector hounding you about it. And don’t think for one minute that they’ll cut you any slack. These folks are in it to win it, and they want to make as much money as they can.

Unfortunately, many take unfair and illegal advantage of debtors because many debtors lack basic knowledge about their rights. To avoid falling for collectors’ traps, you must understand the Fair Debt Collection Practices Act. The Federal Trade Commission explains some of your rights here.

Here are nine little-understood facts your debt collector doesn’t want you to know:

1. You are not obligated to communicate with collection agencies

Tired of receiving the phone calls and letters from pushy collection representatives urging you to pay or else? You can stop those companies dead in their tracks with a cease-and-desist letter.

But understand that they may pursue legal action if you do so. And the agency has the right to notify you via mail of the termination of collection efforts or their intention to turn to the court system for assistance, if applicable.

When a debt collector initially calls, don’t ignore it, and don’t ignore any summons to appear in court about the debt. In that first call or in a follow-up letter, the collector must provide details about the money you supposedly owe.

After that, the Consumer Financial Protection Bureau says:

If you dispute a debt (or part of a debt) in writing within 30 days of when you receive the required information from the debt collector, the debt collector cannot call or contact you until after your dispute has been investigated and the debt collector has provided the verification of the debt in writing to you.
You can also request that the creditor give you the name and address of the original creditor. If you make that request in writing within 30 days, the debt collector has to stop all debt collection activities until the debt collector provides you that information.
If the debt collector reaches out to you before the investigation is complete or starts to harass you about the outstanding balance, they may be in violation of the FDCPA. You can file a complaint with the attorney general’s office in your state, the Federal Trade Commission or the Consumer Financial Protection Bureau. Or you may be able to get free legal help.

2. You don’t have to disclose personal information

There is no law mandating the disclosure of identifying information, such as your Social Security number and your date of birth, to debt collectors. They may insist that it’s required to verify the debt, but it’s not.

3. Paying off an account in collections won’t wipe it from your credit reports

That account in collections will remain on your credit reports for seven years, FICO says, even if you pay it in full.

However, when you negotiate with the collections agency to settle the debt, either by full or partial payment, you can ask that they have the debt removed from your credit reports. If they agree, make sure you have that in writing from them before you pay it off. (See: “Ask Stacy: Can You Help Me Clean Up my Credit History?“)

4. Your assets are not at risk, yet

During the collection process, the representatives are allowed to bug you, with limits, in an effort to collect on the delinquent account. But they cannot garnish your wages unless a judgment is issued in court.

That doesn’t apply to all debt. For instance, the federal government does not need a court order to garnish your wages for student loan debt.

The rule doesn’t apply when you fall behind on your mortgage or car loan. In some states, no court action is required to foreclose on a house. And the repo man doesn’t need a court order to take your car.

Take a look at Nolo’s article to get an idea of which of your assets may be at risk.

5. You may not have to fork over a big chunk of cash immediately

The debt collector wants the largest possible amount it can get from you to beef up its earnings. But you may be able to set up a payment plan that fits within your budget.

Just remember that the collector is not legally required to agree to a payment plan. But you can ask.

6. You may be able to negotiate the best deal at the end of the month

It turns out, you may be able to score the best deal with debt collectors toward the end of the month. Fred Williams, a former collection agent and author of “Fight Back Against Unfair Debt Collection Practices,” told Daily Finance:

I think most agencies go on a calendar month schedule. The end of the month is when collectors’ bonuses are determined. In addition to the increased threats made because they were under pressure to make their quotas, that’s also the time to get a deal because they’re under pressure to bring in the money quickly. They want a settlement, cash in short order. The end of the month is a time to close the deal.
7. You may be able to work with the original creditor

In some instances, the original creditor will be willing to work with you to collect the amount owed. However, if it has already sold the account to a third-party debt collector and charged it off in the books, you’re left with only one option. And that’s working with the debt collectors.

8. Your delinquent debts are nobody’s business

Unless you have spouse or co-signer, or an attorney working on your behalf, debt collectors must keep their lips sealed about your outstanding balances. And if they reach out to others in an effort to locate you, all contact with those people must cease once you are located.

Consumer lawyer Sukhman Dhami told Credit.com:

We call these “third-party disclosures,” a violation of Section 1692c(b) of the Fair Debt Collection Practices Act, and they are exceptionally common, particularly when the debt collector leaves a message on a public answering machine. These public answering machine violations are called “Foti” violations after the landmark case Foti v. NCO Financial Systems.
9. You may be off the hook

Debt collectors probably won’t tell you this, but once the statute of limitations on debt in your state has lapsed, you’re off the hook, although that likely won’t stop them from trying to collect the money. Atlanta bankruptcy lawyer Jonathan Ginsburg told Credit.com:

“In most states, the statute of limitations runs four to six years from the date you last made a payment. And that’s the catch. In some states, a voluntary payment on a stale debt can revive the debt and make it legally collectible. Stale (or zombie) debt is big business,” he adds.
Money Talks News finance expert Stacy Johnson added this advice:

Keep in mind that after the statute of limitations expires, unless the debt has been charged off or discharged in bankruptcy, you still owe the money. In other words, the statute of limitations doesn’t wipe out the debt, it just reduces the legal remedies available to collect it.
So if you find yourself in this situation, the smart move is to call a consumer lawyer (you can find one at the National Association of Consumer Advocates’ website) and ask the attorney what to do.
Another word of advice when dealing with debt collectors: Never fess up until you have confirmed the validity of the debt and the authenticity of the collection agency.

Source: Money Talks News

Return of Debt Ceiling

20140106-195707.jpg

MDC says, the debt ceiling rhetoric is back and we’re quickly approaching it.

Congress has a few things to take care of in the next few weeks, including the omnibus spending bill, the farm bill and possibly an extension of emergency unemployment benefits.

Soon after that, it will face its toughest challenge of the year when Democrats and Republicans will have to find a way to prevent us from defaulting.

The deal to end the government shutdown in October raised the debt ceiling until February 7. After that, Treasury can employ extraordinary measures to extend the deadline even further. How long is still up in the air – it could come as soon as late February or as late as June depending on the amount Treasury collects in tax receipts.

Either way, the debt ceiling is coming and Republicans have been making it very clear recently that they are gearing up for another fight. President Obama and Democrats are expected to employ the same strategy as they used last fall in refusing to negotiate whatsoever. They (rightly) don’t believe that Republicans should be able to demand a ransom for raising the debt ceiling.

This sets up yet another battle that risks hurting the economy just as the recovery seems ready to speed up. Yippee.

College Worth It?

20131225-180002.jpg

That average student loan balance for a 25-year-old is $20,326, according to the Federal Reserve of New York. Student debt is second largest source of U.S. household debt, after only mortgages.

Former Secretary of Education William Bennett, author of Is College Worth It, says “We have about 21 million people in higher education, and about half the people who start four year colleges don’t finish,” .

Those who do finish, who graduated in 2011 – half were either unemployed or radically underemployed and in debt.

Bennett assessed the “return on investment” for the 3500 colleges and universities in the country. He found that returns were positive for only 150 institutions. The top 10 schools ranked by Bennett as having the best “ROI” are below :

1. Harvey Mudd College
2. California Institute of Technology
3. Massachusetts Institute of Technology (MIT)
4. Stanford University
5. Princeton University
6. Harvard University
7. Dartmouth College
8. Duke University
9. University of Pennsylvania
10. University of Notre Dame

He found college is “worth it” if you get into a top tier university like Stanford, or study an in-demand field like nuclear engineering at even a lower tier school.

Girls Gone Wild, Bankrupt

20130312-153311.jpg

The news broke that the soft-core porn company Girls Gone Wild will file for bankruptcy. The company’s decision was largely related to a debt owed to the casino Wynn Las Vegas thanks to the actions of founder Joseph Francis.

But that’s not the only legal trouble that Francis and the company have found themselves in recently. GGW has faced a whole slew of lawsuits for exploiting women, which have substantially contributed to Francis’s financial troubles.
In their bankruptcy filings, GGW cites another debt owed to Tamara Favazza, a woman who sued the company for putting her on film against her will. She won the suit, along with $5.8 million from Francis.

Favazza sued Francis in 2008, claiming someone exposed her breasts while filming in a bar in St. Louis for the “Girls Gone Wild Sorority Orgy” DVD series, according to court documents.
Favazza, a St. Louis resident, won a $5.8 million judgment and then sued Francis, GGW Brands and Mantra Films last year in federal court in Missouri to collect.

GGW Brands called Favazza’s claim a “trade debt” in its Chapter 11 petition. In bankruptcy, trade debts are owed to suppliers, vendors and other service providers.

Favazza is far from alone in demanding remuneration from GGW.

Take, for example, Lindsey Boyd. Now 26, Boyd originally sued the company in 2004 for running video of her as a 14-year-old flashing a cameraman for beads. The case was ultimately decided in November of 2012 — and Boyd lost not because her claim was inaccurate, but because her home state of Georgia had no law in place that protected her photo from being used for commercial use against her consent. In the year 2008, a total of four women sued Francis collectively with similar claims of emotional damages from being filmed underage. Because the company had waivers for them, their cases were also tossed.

Francis has openly admitted to the exploitation that seemed integral to his company’s business model. In 2006, he plead guilty to exploiting minors and paid a fine of $500,000 after admitting that he didn’t keep track of the identities and ages of the women (or girls) captured in his videos. He similarly plead “no contest,” and served a year in jail, for charges of child abuse and prostitution. He was required to post a $1.5 million bond, which likely added to his financial woes.

MDC says, a perfect escape route for Francis and GGW team. Bankrupt? haha…sure thing? Enjoy the dinero down in Cabo that you stole by billing credit cards for product never shipped or entered into a membership club. ADIOS Amigo

Source; think progress