topic Re: Old Medical Collections and Security Clearance in Rebuilding Your Credit

Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 05:37:09 GMT

I currently have myself in a small bind. This forum has been a wealth of information but I have a few questions.

I have a Secret clearance reinvestigation about to begin. My SF-86 is due on the 20th.

I have 3 accounts in collections, 2 from a hospital and 1 from a doctor's office. From what I understand, I'm going to have to prove that I am currently working to pay these debts or there's a good chance my clearance won't be renewed.

I contaced both OCs, they said they not longer own the debt and I will be unable to pay them directly, and pointed me towards the collection agencies.

The 2 accounts with the hospital have a DOFD of 03/2009. The CA has been actively updating the accounts every few months, adding interest. Total for these 2 accounts is appx. $2500 total($1600 originally). They show on all 3 CRs.

The 1 account with the Dr. Office only shows up on TransUnion. The CR shows "Last payment made: 8/31/2009" even though there was never a payment made and it should be a DOFD of 03/2009. Balance is $739($479 originally). It hasn't been updated since 1/2015.

I currently have the funds to pay these off if I squeeze a few dimes out of my pockets. Both CA's have never contacted me, no phone calls, no letters, nothing. I assume they have no intentions of collecting, considering the accounts are outside the SOL, and the lack of interest they have had in contacting me.

My question is, if I offer a PFD, is that considered a written acknowledgement of the debt, and will it restart the date these fall off if the CA denies a PFD? I'd like to purchase a house this spring, and was counting on these accounts dropping off my CRs.

Also, from what I've read, a PFD usually needs to be in the full amount. I'd be willing to test the waters with the account that has the smaller balance, but PFD for the original amount due. Is this a feasible way to proceed? It wouldn't be so bad if I stretched 3 PFDs over a few months.

Would it be worth it to offer to settle for a much smaller amount and DV with the CA or CRA to try to get the accounts to drop off my CR's?

I need to figure out how to show that I am taking care of these accounts, but don't want to wreck my credit which should be clean in a few months. I've been completely forthcoming on the SF-86, lying about this type of thing would be a nail in the coffin. I feel like doing a DV first might make me seem like I'm dodging the issue to the investigator instead of taking care of the debts.

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 06:07:25 GMT

If they DoFD is 3/09 then they should fall off in March. Call the credit bureaus and talk to a supervisor and ask for an EE (Early Exclusion). TU will almost certainly do it since they usually will up to 6 months early. Experian is usually 1-3 months and EQ 1-2 months. Sending a PFD will not restart the clock.

Re: Old Medical Collections and Security Clearance

thectdude — Mon, 18 Jan 2016 12:49:05 GMT

Contact the CA's and work out a payment plan. As a cleared individual myself they will have access to the financials so if you hide it they will look at that unfavorably. All you have to show is that you have a plan in place to take care of the financial obligation. That will allow the adjudicator some leeway in the review process

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 17:04:58 GMT

I've been totally upfront about the debts. I'll probably start with a PFD offer for the smaller debt, and try working something out regarding the other debts. Thanks.

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 17:47:06 GMT

I understand you are in a bit of a time crunch but remeber if you pay these it will not improve you credit and could possibly drop your score for the update to paid collection if you don't get a PFD agreement from the CA. If you had started on this a few months ago I would have sugested you google the HIPAA Letter Process, beware that paid medical collections are difficult to get removed from you credit report. You should be able to get them removed with an early exclusion because paying them does not change the original DOFD.

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 18:18:13 GMT

@Anonymous wrote:
I understand you are in a bit of a time crunch but remeber if you pay these it will not improve you credit and could possibly drop your score for the update to paid collection if you don't get a PFD agreement from the CA. If you had started on this a few months ago I would have sugested you google the HIPAA Letter Process, beware that paid medical collections are difficult to get removed from you credit report. You should be able to get them removed with an early exclusion because paying them does not change the original DOFD.

Paying/settling these will not drop his score. They are already being updated monthly. Scores are simply not the issue here anyway, as they will be gone in a few months. HIPPA process is not warranted here, IMO as they are close to dropping, and it may take too long, OP is under a deadline.

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 18:25:33 GMT

So if I understand correctly, paying/settling these debts with the CA will not change the drop off date? Should I ask for early exclusion before or after settling, or does it not matter?

Re: Old Medical Collections and Security Clearance

RobertEG — Mon, 18 Jan 2016 19:19:54 GMT

I dont see credit report exclusion as a relevant issue with respect to the background investigation.

They are aware, via your disclosure in the SF-86, of unpaid, delinquent debt. That is the concern in the background investigation, not the issue of whether it is reflected in your credit report or credit score.

The degree to which you must show that you are addressing the debt depends upon the criteria associated with clearance for the specific job.

Jobs, for example, with executive, feduciary, or budgetary responsibilities have specific sensitivity levels that affect the clearance approval criteria.

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 20:19:08 GMT

@Anonymous wrote:
So if I understand correctly, paying/settling these debts with the CA will not change the drop off date? Should I ask for early exclusion before or after settling, or does it not matter?

That is correct, paying it will not change anything. No need to wait for the early exclusion request. TU will probably remove it now, EX may remove it now or next month, EQ is always the hold-out, usually waiting until the last month.

Re: Old Medical Collections and Security Clearance

Anonymous — Mon, 18 Jan 2016 21:10:27 GMT

RobertEG: The only reason I was addressing exclusion was looking forward to applying for a mortgage loan this spring. As you said, it's irrelevant to the investigation. I was trying to kill 2 birds with 1 stone, and this has helped me out quite a bit.

NormanFH: Thanks for verifying. I think I have read some bad information in the past about paying off debts causing the drop-off date to restart.

Next step will be to try and settle with the CA's, hopefully this week.

Re: Old Medical Collections and Security Clearance

Anonymous — Tue, 19 Jan 2016 07:56:21 GMT

@Anonymous wrote:
RobertEG: The only reason I was addressing exclusion was looking forward to applying for a mortgage loan this spring. As you said, it's irrelevant to the investigation. I was trying to kill 2 birds with 1 stone, and this has helped me out quite a bit.

NormanFH: Thanks for verifying. I think I have read some bad information in the past about paying off debts causing the drop-off date to restart.

Next step will be to try and settle with the CA's, hopefully this week.

Yes, it seems to be a very common misconception. We have to dispell that particular myth on a daily basis around here.

Re: Old Medical Collections and Security Clearance

Anonymous — Tue, 19 Jan 2016 21:45:42 GMT

Update: Called 2 different numbers for CA collecting for hospital. Neither phone number was working. Settlement offers will be in the mail.

Called second collection agency. She first asked for total amount plus interest and fees. I said I could not pay that amount and asked if they could settle for 50% of the original balance. She then said that the Dr's office might agree to just paying off the original amount, asked if I could pay it today. I said no. She asked if I could make 2 payments. I said no, would they take a settlement offer. She kept repeating how they are collecting for the Dr's office and they needed at least the original amount and she could call the and see if they would take that amout and could I pay it today. Wouldn't back down, but was polite enough about it. That was enough for me I told her thanks, bye.

It was my understanding that the debt has been sold. This should have nothing to do with the Dr's office, and I'm being stonewalled. Can't be upset about a person wanting to collect a commision, but they never contacted me, and it's past SOL, and due to drop soon. What gives? If the debt doesn't belong to the Dr's office is it just a tactic to get me to not settle? Doesn't the Dr's office write off the debt in a tax return, then sell it?

I'm about to send a DV or settlement letter to the second CA. Probably need a few hours to cool off and think about it.

Re: Old Medical Collections and Security Clearance

Anonymous — Tue, 19 Jan 2016 22:44:05 GMT

@Anonymous wrote:
Update: Called 2 different numbers for CA collecting for hospital. Neither phone number was working. Settlement offers will be in the mail.

Called second collection agency. She first asked for total amount plus interest and fees. I said I could not pay that amount and asked if they could settle for 50% of the original balance. She then said that the Dr's office might agree to just paying off the original amount, asked if I could pay it today. I said no. She asked if I could make 2 payments. I said no, would they take a settlement offer. She kept repeating how they are collecting for the Dr's office and they needed at least the original amount and she could call the and see if they would take that amout and could I pay it today. Wouldn't back down, but was polite enough about it. That was enough for me I told her thanks, bye.

It was my understanding that the debt has been sold. This should have nothing to do with the Dr's office, and I'm being stonewalled. Can't be upset about a person wanting to collect a commision, but they never contacted me, and it's past SOL, and due to drop soon. What gives? If the debt doesn't belong to the Dr's office is it just a tactic to get me to not settle? Doesn't the Dr's office write off the debt in a tax return, then sell it?

I'm about to send a DV or settlement letter to the second CA. Probably need a few hours to cool off and think about it.

Most medical debt is NOT sold, the providers generally hire CA's as their "hired guns" to do their collecting. If they are telling you the Dr still owns it, I would contact them and find out if thats the case or not - if you really want to settle it for less.

Re: Old Medical Collections and Security Clearance

Anonymous — Tue, 19 Jan 2016 23:59:17 GMT

@Anonymous wrote:
@Anonymous wrote:
Update: Called 2 different numbers for CA collecting for hospital. Neither phone number was working. Settlement offers will be in the mail.

Called second collection agency. She first asked for total amount plus interest and fees. I said I could not pay that amount and asked if they could settle for 50% of the original balance. She then said that the Dr's office might agree to just paying off the original amount, asked if I could pay it today. I said no. She asked if I could make 2 payments. I said no, would they take a settlement offer. She kept repeating how they are collecting for the Dr's office and they needed at least the original amount and she could call the and see if they would take that amout and could I pay it today. Wouldn't back down, but was polite enough about it. That was enough for me I told her thanks, bye.

It was my understanding that the debt has been sold. This should have nothing to do with the Dr's office, and I'm being stonewalled. Can't be upset about a person wanting to collect a commision, but they never contacted me, and it's past SOL, and due to drop soon. What gives? If the debt doesn't belong to the Dr's office is it just a tactic to get me to not settle? Doesn't the Dr's office write off the debt in a tax return, then sell it?

I'm about to send a DV or settlement letter to the second CA. Probably need a few hours to cool off and think about it.
Most medical debt is NOT sold, the providers generally hire CA's as their "hired guns" to do their collecting. If they are telling you the Dr still owns it, I would contact them and find out if thats the case or not - if you really want to settle it for less.

After reading this, I decided to call back the hospital and get a better answer from their billing dept. and how their collections work. I got a different answer this time, and was told that the CA collects for the hospital (as you said Norman) and they won't be able to settle, and will probably have interest and fees attached to the account. So, I bit the bullet and called the CA. The rep was very polite, took my info, looked up the accounts (which included a ~$33 bill for labwork I didn't know about), and let me know the current balances. She asked what I would like to do. I asked her if she would take payment for the original amounts, based on the goodwill that I'm reaching out to take care of these debts. She said no problem, took payment over the phone. The eye-opener for me was that the hospital payment actually goes through the hospital, and they send me a receipt. I'm buggered as to why the hospital wouldn't accept a payment directly, but it's taken care of. At this point I decided to call the other CA back, and pay off the original balance. Payed off over the phone. I verified with my CC that I was charged only the exact amount that we agreed on.

To all who gave advice, thank you. I realize this entire debacle could have been settled in 20 minutes, but I had no idea how it all was going to play out, or what I was getting into. I'm glad I got the young and dumb out of me years ago, and came out somewhat unscathed.

Re: Old Medical Collections and Security Clearance

Anonymous — Wed, 20 Jan 2016 01:06:34 GMT

@Anonymous wrote:
I currently have myself in a small bind. This forum has been a wealth of information but I have a few questions.
I have a Secret clearance reinvestigation about to begin. My SF-86 is due on the 20th.
I have 3 accounts in collections, 2 from a hospital and 1 from a doctor's office. From what I understand, I'm going to have to prove that I am currently working to pay these debts or there's a good chance my clearance won't be renewed.
I contaced both OCs, they said they not longer own the debt and I will be unable to pay them directly, and pointed me towards the collection agencies.
The 2 accounts with the hospital have a DOFD of 03/2009. The CA has been actively updating the accounts every few months, adding interest. Total for these 2 accounts is appx. $2500 total($1600 originally). They show on all 3 CRs.
The 1 account with the Dr. Office only shows up on TransUnion. The CR shows "Last payment made: 8/31/2009" even though there was never a payment made and it should be a DOFD of 03/2009. Balance is $739($479 originally). It hasn't been updated since 1/2015.
I currently have the funds to pay these off if I squeeze a few dimes out of my pockets. Both CA's have never contacted me, no phone calls, no letters, nothing. I assume they have no intentions of collecting, considering the accounts are outside the SOL, and the lack of interest they have had in contacting me.

My question is, if I offer a PFD, is that considered a written acknowledgement of the debt, and will it restart the date these fall off if the CA denies a PFD? I'd like to purchase a house this spring, and was counting on these accounts dropping off my CRs.
Also, from what I've read, a PFD usually needs to be in the full amount. I'd be willing to test the waters with the account that has the smaller balance, but PFD for the original amount due. Is this a feasible way to proceed? It wouldn't be so bad if I stretched 3 PFDs over a few months.
Would it be worth it to offer to settle for a much smaller amount and DV with the CA or CRA to try to get the accounts to drop off my CR's?
I need to figure out how to show that I am taking care of these accounts, but don't want to wreck my credit which should be clean in a few months. I've been completely forthcoming on the SF-86, lying about this type of thing would be a nail in the coffin. I feel like doing a DV first might make me seem like I'm dodging the issue to the investigator instead of taking care of the debts.

I got my Secret Clearance in 2013 after an interview with an officer with the OPM. He went over EVERY SINGLE ITEM in my credit report and literally asked questions on each one of them. I had an outstanding collection and he asked what happened and I told him it was from a speeding ticket that I didn't agree with and didn't pay out of spite. He didn't seem to fazed by it and I turned out just fine and got the job.