You just found out that some mystery medical bill got sent to collections... What you can do?

It’s a great question. And while there is no surefire method for removing a medical bill from your credit report, you do have some options. That is, if you’re willing to put some work into finding a solution.

Request validation & verification

When dealing with debt collectors, it’s important to remember that the Fair Debt Collection Practices Act (FDCPA) exists to protect you. Debt collectors are strictly regulated, and safeguards have been put in place to ensure that consumers, like you, aren’t taken advantage of by deceitful collection agencies.

One of the first and most important requirements that debt collectors must abide by is the validation letter requirement. Under § 809 of the FDCPA, you are entitled to receive a written notice within five days of the debt collector’s first communication with you. That written notice must contain the following:

1. The amount of the debt,
2. The name of the current creditor,
3. A statement explaining that the collector will assume the debt is valid unless you dispute its validity within 30 days,
4. A statement explaining that you are entitled to verification of the debt (that you can make the collector prove that the debt is legitimate), and
5. A statement explaining that you may request the name and address of the original creditor.

This means that your first step in dealing with a debt collector is always to look for a validation letter. If a debt collector contacts you via mail, the information required in the validation notice is likely included in that initial letter. However, if you cannot find the required information in the initial letter and do not receive such a letter within five days from the date that the debt collector first contacts you, it’s time to request a validation letter.

Once you do receive the validation letter, a 30-day clock begins running. You have 30 days to dispute the debt, or the collector will assume that the debt is valid. To dispute the debt, you will need to send a debt verification letter. The Consumer Financial Protection Bureau has put together some sample letters, which you can utilize. You should also be sure to send the letter via certified mail, with return receipts requested, so you can prove that you sent the letter. You should try to send this letter as soon as the collector contacts you to stop the collector from contacting you until they verify the debt.

Once you’ve sent the verification letter, the collector is required by law to provide you with the necessary information to verify the debt. If they do not or cannot provide the information, they may not pursue collection of the debt any further–meaning they cannot report the debt on your credit report. You can then use this information to request that the credit bureaus remove the debt from your report.

Dispute it with the credit bureaus

When dealing with a medical debt collection action on your credit report, your second option is to dispute it with the credit bureaus directly. Remember, if you have requested verification from a debt collection agency and haven’t received a response, the collectors cannot continue collecting–meaning that debt should not appear on your credit report, and you likely can dispute the debt with the bureaus if it does so appear.

However, that isn’t the only instance when you can dispute a debt with the reporting bureaus. If you identify any errors in your report, you can also dispute the debt on those grounds. Potential errors include debts that don’t belong to you, incorrect identification information (like phone numbers, names, and addresses), debts that are not delinquent, and any other inaccurate information.

When you identify an inaccuracy, you’ll need to submit a dispute to each of the credit bureaus displaying the inaccurate information–adding a bit of difficulty to the process, as each entity has a different reporting process. Lucky for you, you can find all of the information you need here:

If the reporting bureaus do find inaccurate information, they must remove it from your credit report by law. The bureaus must investigate your claim within 30 days of your report and then provide you with results within five days of completing their investigation. So, if you haven’t heard back from the bureaus within 40-45 days of filing the report, you should probably reach back out to them.

Find out if your health insurance will pay the debt

If it turns out that the debt is legitimate (because the collector provides the required verification letter) and you actually owe the debt, then disputing the debt isn’t likely to offer you much help. When this happens, your gut might tell you just to face the music and pay the bill yourself, if you can. While debt collectors would like you to think that this is the best option, it is not. If you are thinking about doing this, PLEASE STOP.

A tricky fact about medical debt that many don’t realize is that if you pay off medical debt in collections, the debt remains on your credit report, BUT if your health insurance provider pays the debt off, then the bureaus should remove the debt from your credit report.

So, if there is any chance that a medical bill you are being asked to pay should fall under the responsibility of your insurance, you should do everything you can to get your insurance provider to pay it.

Ask for a goodwill removal

Another potential removal tactic is the goodwill letter or request. Essentially, you’re asking the lender or collection agency to remove the collection action from your credit report as–you guessed it–an act of goodwill. While this is not a removal tactic that is officially authorized in any way, it does provide at least a slight possibility of removal.

When requesting a goodwill removal, you can send a letter by mail or email, or call the collection agency directly. In any case, you will want to be prepared to make your case to the collection agent, including explaining any extraneous circumstances that lead to your delinquency. But if you don’t receive the answer that you’re looking for, don’t be surprised. Typically, collection agencies are legally obligated not to remove a collection action from a credit report for goodwill purposes, so the hands of whoever you talk to are likely tied. Don’t take your frustration out on them; they’re just a person trying to do their job.

If you are going to pursue this path, you can find a sample letter here.

A last-ditch effort: Pay for delete

A final possibility is the “pay for delete” approach. This tactic basically entails offering to pay the debt in exchange for the collector deleting the collection account from your credit report. It sounds good in theory, but it most likely won’t work. Collectors must report accurate information to the credit bureaus, so deleting a delinquent debt because the debtor paid it off doesn’t lend itself to an accurate picture of a consumer’s credit history.

In most cases, this isn’t worth the time you’ll waste on the phone, as most of the time, the answer will be no. However, it has worked in the past, so make your own decision on whether it’s worth a try.

A final warning: Watch out for debt parking

If one day you take a look at your credit report and see a collection action for a debt you don’t recognize or one that you never received a bill for, you may be the victim of illegal debt parking.

Debt parking occurs when unsavory collectors place collection actions on your credit report that either (1) they have not attempted to collect or (2) are simply false. The FTC recently obtained a $24 million judgment against a collection agency that collected millions of dollars of bogus debt that it had placed on consumers’ credit reports.

So, if you see something out of the usual, try to keep a cool head, and go back to the steps we just discussed. Always request verification of a debt before you consider paying it. If the creditor cannot or will not verify the debt, it’s probably wise to seek legal counsel before you take any further steps.