Yes, anytime you do not pay as agreed, you are in default of the agreement and the account can be "turned over" to collections or assigned and they can pursue you from there. Unfortunate, considering your circumstances, but this happens everyday. Many people seek bankruptcy relief, when appropriate, under these circumstances.
Advice on this forum is for informational purposes only and should never be mistaken as a substitute for legal advice. If you are in need of legal advice, you should consult local legal counsel.
Yes you can be turned over to a credit collection firm, even if paying.
If you want to pay the bill, and you have some ability to do so without compromising your health, safety and welfare (do not go hungry to pay this bill), then you should do the best you can, by regularly paying a reduced amount.
You do not need the hospital's permission to pay, and they will certainly not send back any of your payment.
The hospital can turn over this collection account to another firm, and that collection firm will have no better position than the hospital, other than contacting you more often to seek payment.
Making regular payments is often forgotten as a remedy to pay off an account, when a creditor insists on greater amounts.
I have yet to see a creditor that files a lawsuit while regular payments are being accepted. Usually there are months or years of non payment before a collection lawsuit is filed.
If collections turn into litigation, you can defend the lawsuit, or file bankruptcy if qualified. Your income tax refund may be exempt in the event of a bankruptcy.
Without further facts to consider as to your unforeseen expenses, you may wish to contact qualified bankruptcy counsel for advice, because it sounds like making any payment at present has become a burden. Many bankruptcy law firms provide an initial consultation without charge.
General legal advice is offered for educational purposes only. A consultation with a qualified attorney is required to determine specific legal advice as to your situation and applicable law. We are a debt relief agency and we help people file for relief under the bankruptcy laws.