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A comment on Insured, but Still Owing $109K for a Heart Attack. Parent comment

Re:Insured, but Still Owing $109K for a Heart Attack by defen on Tuesday August 28, 2018 @03:27PM (#17862061)
> Just let it go to collections. You'll get harassed for a little over a year. Debt older than a year is almost never pursued by collections agencies.

I don't understand. Is there no penalty to not paying other than a hit on your credit score? Can't you end up with wage garnishments or liens or something like that?

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Re:Insured, but Still Owing $109K for a Heart Attack by dawnerd on Tuesday August 28, 2018 @05:43PM (#17863174)
It'll definitely show up on your credit report. The key is a lot of lenders supposedly will just look past it. Ultimately it's up to them if you get a loan or not, not just based on the number alone.
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Re:Insured, but Still Owing $109K for a Heart Attack by observer12 on Tuesday August 28, 2018 @06:15PM (#17863415)
One caveat, you definitely want to contest the debt in writing regularly. If it goes away because the collector failed to respond you are fine. If it goes away because they "forgive" the debt, its seen as income by the IRS and you will pay taxes on it. So imagine the tax bill if 200K of "income" is added to your taxes one year.
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Re:Insured, but Still Owing $109K for a Heart Attack by UncleEntity on Tuesday August 28, 2018 @05:19PM (#17862985)
Where I live (Arizona) there's a statute of limitations on consumer debt, think it's 2 years for random bills and 3 years for recurring payments...or something similar.
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Re:Insured, but Still Owing $109K for a Heart Attack by gowld on Tuesday August 28, 2018 @09:10PM (#17864400)
That sounds like legalized theft. Why pay any non recurring bills ever?
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Re:Insured, but Still Owing $109K for a Heart Attack by Sohcahtoa82 on Tuesday August 28, 2018 @08:06PM (#17864032)
Nope. Wage garnishments and liens only happen with debts to the government such as unpaid taxes, child support, or fines.
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Re:Insured, but Still Owing $109K for a Heart Attack by defen on Tuesday August 28, 2018 @11:09PM (#17865211)
Ok but can't the hospital (or the collections agency) take you to court? Let's say you have 100k bill from the hospital that you just ignore. They sell it to a collections agency for 60k. You refuse to pay the collections agency. Now what happens?
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Re:Insured, but Still Owing $109K for a Heart Attack by Sohcahtoa82 on Wednesday August 29, 2018 @04:08PM (#17871461)
Did some more research on this...

Yes, the hospital or collections agency can sue you to try to garnish your wages. If they win, you're boned.

If they lose, or they never sue for garnishment, it's unclear what happens if you refuse to pay. From what I can tell, the debt disappears from your credit report after seven years, but the debt is still valid and they can still try to recover the money from you, but they won't be able to use the courts to do it.

However, there's always the option of declaring bankruptcy. Even if they garnish wages, declaring bankruptcy will wipe it away. Obviously, that's the nuclear option and will destroy your credit rating for seven years.

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