Medical emergencies and late payments

[arkane]

Purely theoretical, but can late payments ever be removed for entirely legitimate reasons beyond one's control? If someone gets into a serious accident and is hospitalized for a few months, I can't fathom they won't have any recourse about the derogs that hit their report, if they can provide full and detailed documentation from the hospital.

The hopeful part of me wants to think the answer is obvious, given that GWD and PFD are a thing, and you couldn't have a more legitimate excuse than I was fighting for my life on a hospital bed for 3 months, what more do you want?? But the cynical part me feels like this is something that would still be pulling teeth levels of painful to try and get ironed out. 

[Anonymous]

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@arkane wrote:

Purely theoretical, but can late payments ever be removed for entirely legitimate reasons beyond one's control? If someone gets into a serious accident and is hospitalized for a few months, I can't fathom they won't have any recourse about the derogs that hit their report, if they can provide full and detailed documentation from the hospital.

The hopeful part of me wants to think the answer is obvious, given that GWD and PFD are a thing, and you couldn't have a more legitimate excuse than I was fighting for my life on a hospital bed for 3 months, what more do you want?? But the cynical part me feels like this is something that would still be pulling teeth levels of painful to try and get ironed out. 

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It’s possible to get late payments removed for life events. But they are under no obligation to remove them. All a person can do is tell their circumstances and see what happens.

[Anonymous]

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@Anonymous wrote:

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@arkane wrote:

Purely theoretical, but can late payments ever be removed for entirely legitimate reasons beyond one's control? If someone gets into a serious accident and is hospitalized for a few months, I can't fathom they won't have any recourse about the derogs that hit their report, if they can provide full and detailed documentation from the hospital.

The hopeful part of me wants to think the answer is obvious, given that GWD and PFD are a thing, and you couldn't have a more legitimate excuse than I was fighting for my life on a hospital bed for 3 months, what more do you want?? But the cynical part me feels like this is something that would still be pulling teeth levels of painful to try and get ironed out. 

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It’s possible to get late payments removed for life events. But they are under no obligation to remove them. All a person can do is tell their circumstances and see what happens.

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It really does depend on jurisdiction and the exact circumstance, though.  In some states you can get a deferment if you are incapacitated (such as comatose from a car accident) for up to six months, basically everything gets put on hold, but it requires court proceedings and is very similar to how a BK is put together, though the waters get very murky when dealing with out of state creditors.

In most cases though id reckon youd be at the mercy of the collector.

[arkane]

Well I guess I was right to be cynical, these are entirely too depressing answers.

[atarvuzdar]

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@arkane wrote:

Well I guess I was right to be cynical, these are entirely too depressing answers.

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OP, sorry to hear about your circumstances. Glad to hear you're healthy now. Definitely try to contact your creditors. Some may listen. But even if they don't... you've got great scores already! 

[Anonymous]

Life emergencies happen to all of us, and different people define emergency differently.  

Since they're expected to happen, we're expected to prepare for them the best we can.  Since a late payment notification is avoided with just making the minimum payment, the idea is to not spend more than you can afford to pay the minimum on for a period of time that lasts the emergency.  Say 6 months.

If your minimum payments on ALL your debts, PLUS your living expenses (shelter, food, transportation, insurances) all exceed 1/6th of your emergency savings, you're already in over your head.  Banks know this.

The reality is that since these emergencies are likely to happen at some point, and we know they will eventually, there's no excuse NOT to be prepared for it.

Yes, a bank may offer a goodwill deletion -- and many usually do if you push hard enough.  But the responsibility to avoid it is something folks can and should plan for years in advance.

Not the answer anyone wants to hear, but the cold splash of reality isn't always positive.

[Anonymous]

@ABCD2199

I agree with what you are saying to an extent as that is exactly how a bank would view things.

But I have to take fault with your expectations of others. Saving for an emergency is great until it happens, and then happens again. The reality is some have less to work with than others. Don't assume that because someone can't afford to pay for a medical expense that it's because of poor life choices. Several years back I had a child who required surgery at a cost of over $450k. Someone please tell me how a person making $8hr can possibly prepare themselves for such a situation. Fortunately at the time I had good insurance and a decent job. But for me this hasn't always been the case. Your right reality isn't always positive.

I also want to say It's not really my intent to call you out. I just wanted to point out that saving for a rainy day is great but sometimes when it rains it pours.

[Anonymous]

I don't think it's so much saving for a rainy day as it is simply being prepared for life events.  One perfect example would be autopay set on all your accounts at the minimum payment.  If you were in a hospitalized state, at least you'd still be making on-time payments so long as your account had the funds.  Some banks even let you overdraft on the account a handful of times; getting an overdraft fee is definitely better than a late payment on a credit account.

To answer the question of the OP, it all comes down the a GW adjustment attempt.  Given the situation you described, I would think that most creditors would feel that's a valid reason and grant the GW adjustment.  I mean, if some are willing to grant GW simply from someone telling them "oops, I messed up and won't let it happen again" I feel the chances would be far greater with a real life catastrophe, especially if you provided some sort of documentation backing it up to go along with your GW letter.

In short, no a creditor doesn't have to help you out during these situations, but IMO the vast majority would.

[Anonymous]

I'll admit I was quick to jump on my soap box.

Yes setting up auto payments is a great way to avoid any lates due to being incapacitated. It's also a good reason for spouses to have access to each others accts. I don't use auto payments for my own reasons, but my DW is able to access my accts if need be.

[arkane]

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@atarvuzdar wrote:

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@arkane wrote:

Well I guess I was right to be cynical, these are entirely too depressing answers.

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OP, sorry to hear about your circumstances. Glad to hear you're healthy now. Definitely try to contact your creditors. Some may listen. But even if they don't... you've got great scores already! 

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Lol this was purely a hypothetical I was curious about but thanks for the support nonetheless. 

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@Anonymous wrote:

Life emergencies happen to all of us, and different people define emergency differently.  

Since they're expected to happen, we're expected to prepare for them the best we can.  Since a late payment notification is avoided with just making the minimum payment, the idea is to not spend more than you can afford to pay the minimum on for a period of time that lasts the emergency.  Say 6 months.

If your minimum payments on ALL your debts, PLUS your living expenses (shelter, food, transportation, insurances) all exceed 1/6th of your emergency savings, you're already in over your head.  Banks know this.

The reality is that since these emergencies are likely to happen at some point, and we know they will eventually, there's no excuse NOT to be prepared for it.

Yes, a bank may offer a goodwill deletion -- and many usually do if you push hard enough.  But the responsibility to avoid it is something folks can and should plan for years in advance.

Not the answer anyone wants to hear, but the cold splash of reality isn't always positive.

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Well this isn't so much about finances as it is about being completely incapcitated and unable to tend to anything yourself (or even being conscious). But I guess this is one situation where an argument for autopay and giving your SO access to your accounts could be made.