When A Medical Bill Goes into Collections:
When you owe money to a healthcare provider and fail to pay it, they may enlist the assistance of a collection agency to retrieve the debt on their behalf. At this point, the lender considers the debt a loss and passes the responsibility of financial negotiation to the collection agency. The collection agency acts as a middleman to recover the amount owed from you.
When a lender cannot collect a debt from a borrower, they typically sell it to a collection agency within 30 to 60 days. You will receive a call from the collection agency to inform you of this change in ownership. Previously, a consumer had 6 months to pay off the debt before the collection agency reported it on their credit report. However, this time period has recently been extended to 12 months, giving consumers more time to pay off the debt before it negatively affects their credit. Having a medical debt sent to debt collections will negatively impact your credit score report, potentially lowering your credit score.