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Medical bills in Washington State resulted in a lien on my house. Can a collection agency foreclose (on my paid for house).?

Seattle, WA |

I'm out of work, hard a heart attack several years ago with no insurance or job. They got a lien placed on my house. I'm older (not quite retirement age though) and I have some assets but not enough to use those for dealing with this $60k + $30k interest debt which resulted from a stent and 2 1/2 days in the hospital.

I recently got a 48 hour demand letter from the collection agency. What can they do? Can they foreclose?

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Attorney answers 2

Posted

If you fail to pay a medical bill - the collection company can sue you. If you are sued - it can result in a judgment. A judgment can act as a judgment lien and can last for up to 20 years. You are allowed to exempt 125k of equity in your home through a homestead exemption. It is possible to foreclose on a judgment. However, I cannot tell from your post if there is a judgment - or if the creditor is telling you false information. It is not uncommon for some creditors to intentional mislead people by telling them inaccurate collection remedies - or using accurate terms - but, not . in the proper context.

Contact Northwest Justice Project and screen for counsel. http://nwjustice.org/get-legal-help

Asker

Posted

There is a judgement. They sued me earlier and I didn't contest it (a mistake I know). Is there anything I can do? The original bill was very high and now with 12% interest it's ridiculous. Is the debt still "owned" by the hospital or is the creditor now actually the collection agency? Is there any incentive for the hospital to negotiate once they have a lien on my house?

John Groseclose

John Groseclose

Posted

You have a serious problem. You need an actual 30 minute consult with a bankruptcy attorney in your area. Usually, those attorneys are skilled at negotiation using a liquidation analysis. Good Luck.

Posted

Probably not. The creditor has to sue you first and win and then it would have to do a judicial foreclosure which is a pain the butt for the creditor and is very rare. If somehow WA State DSHS is your creditor the state can get lien rights without a lawsuit, but DSHS usually just lets the lien sit there until the house is sold by you or your estate after your death and the bills gets paid as part of the sale's process. The info about the $125K exemption of sale's proceeds either from voluntary sale or foreclosure sale is correct, this is know as the "homestead exemption".

Asker

Posted

They already sued me and got a judgement years ago. I didn't fight it (but should have). The creditor is a collection agency or hospital (not sure which at this point...don't know if it was assigned by the hospital or purchased by the agency). I suppose there is no negotiation now regarding the amount of the judgement since it's now a judgement. $60k for two days in the hospital for a mild heart attack with no extenuating circumstances is certainly more than an insurance company would pay...$30k a day? 12% interest is unbelievable for a medical bill I had no choice but to incur and had no control over the "pricing" and now at 12% it's alway s going to go up more than the value of my house. If I had no assets I would have no bill as there are programs for that. Because I'm older and have a few assets (and must have them to live) it seems there is no reasonable solution for me?