Debt Collectors Sue Over Medical Bills as Small as $60

April 28 01:00 2016 by ushadmin

Two years ago, the president of Credit Management Services, a collection agency in Grand Island, Nebraska, presented a struggling local family with the keys to a used 2007 Mercury Grand Marquis. To commemorate the donation, the company held a ceremony that concluded outside its offices, where the couple and their two young girls could try out their new car.
The family’s story was dire: their eight-year-old daughter’s failing kidney had led to multiple surgeries and a deluge of medical bills, according to an article in the local newspaper.

But CMS played another role in the family’s life, one the article didn’t mention. The company had previously sued the couple eight times over unpaid medical bills and garnished both of their wages. As recently as two weeks earlier, CMS had seized $156, a quarter of the girl’s father’s paycheck.

Shortly after the ceremony, CMS released the family from further garnishment, court records show. But just four months later, the company filed a motion to start up again. The couple, who did not respond to attempts by ProPublica to contact them, has since declared bankruptcy.

In almost any other state, such a barrage of lawsuits against a family in desperate financial straits would be remarkable. Not in Nebraska. There, debt collectors frequently sue over medical debts as small as $60 and a simple missed doctor’s bill can quickly land you in court.

Filing suit is one of the most aggressive ways to collect debt, but no one tracks how frequently it happens or to whom. An examination of Nebraska’s courts, however, shows that where debtors live can have an enormous, and unexpected, impact on the quantity and types of lawsuits…