Dear Opening Credits,
One of my employees hadsurgery done when she was a minor. The bill was, of course, given to herparents, who did not end up paying the bill. She is now 21 years old and cameto me when I discovered she had problems with her credit. The only problem wasthis medical charge, which the hospital sent to collections (not to her parentsanymore, but to her now, since she is no longer a minor). She signed nothingstating she would pay. Is this legal? Is there a process to get this removedfrom her record?  -- Tim

Dear Tim,
Here are two messages to passon to your anxious, credit-damaged worker:

  • Breathe a big sigh of relief. It is highly unlikely that she will bear legal responsibility for the debt.
  • Get into action mode. To resolve this mess, she's going to need to do a bit of work.

The fact that your employee was underthe age of 18 when she went to the hospital for that procedure is key to her"case." Minors (unless formally emancipated) cannot enter into a legally binding contract and can't be held liable for a bill. Hence, neither thehospital where she had her operation nor the collection agency to which theysold the debt has the right to pursue her for payment or report it to thecredit bureaus.

Her parents, on the other hand, may not be so protected. Eventually, this bill will boomerang back tothem, as they are the ones who almost certainly consented to take care of it inthe first place. According to Wendy Britton, a registered nurse and healthcare consultant out ofNorwalk, Iowa, "any and all minors admitted to a hospital have to beaccompanied by an adult who will assume financial responsibility for thebill. That's industry standard across the country." During admissions, they had to complete some lengthy forms,and embedded in them was some wording about payment. If they signed, theyagreed to assume the charges.

Now on to the work part ...

Your employee must take action to stopthe collector from unlawfully reporting the delinquent debt to the creditbureaus. It's unfairly wreaking havoc on her  credit history and credit score.

Herfirst stop is the hospital itself. "She needs to get proof of the date ofservices and her age when the procedures happened," Britton says. "She'llneed copies of the original paperwork with her birth date indicating that shewas a minor when she had the procedure."

Onceshe has those documents, have her make multiple copies and send a set each tothe collection agency and the three major credit reporting bureaus. (Each has its own formal dispute process to follow, but this evidence willexpedite damage control.) She should attach a letter summarizing the situation.It should also say that she expects the collectors to cease reporting the debtto the bureaus and for the bureaus to stop listing it.

Ofcourse, the collection agency may turn around and pursue her parents forpayment and begin to report the debt on their reports, but for her, the mattershould be cleared up relatively quickly. (The bureaus have 30 days to investigate.)

Bearin mind that time lines are important. Assuming she was a day shy of 18 when theoperation occurred and she just turned 21, the debt is three years old at thevery youngest. If no one pays up, it will appear on the responsible party'scredit report for another four years. That may not be so bad, but getting suedis a risk, so I recommend her parents check the statute of limitations forlawsuits and unsecured debts for their state.

Finally,it may be wise for her to contact the hospital's public relations departmentand explain what's going on. They're probably unaware that the collectionagency they sell outstanding debts to is breaking the law, and they may stopusing the agency when notified. If the hospital is unresponsive, it could beeffective to contact the local newspaper, too, says Britton. "If that showed up in anewspaper, I'd guarantee the hospital would sit up and take notice."

By the way, your employee is lucky tohave such a concerned and involved boss.

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