1 of 3 American Adults are in debt collections.. does this seem high to anyone other than me?

http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN&hpt=hp_t2
As a business owner I deal with people who refuse to pay their bills on a daily basis. From my own experiences I am frequently amazed that some people who are gainfully employed are perfectly willing to go in to collections rather than pay something as small as a $25 debt. I am guessing that a lot of these people are of the impression that if they ignore a bill long enough it will eventually just go away and this is now they manage their finances. Still one third in collections seems like an awfully high number. Hard to believe and a bit scary too.

With debts as low as $25.00 for incidentals like parking tickets I can see how easily the figures are inflated. Who hasn’t just jammed a ticket in the glovebox and forgoten to pay it? I would be more interested in how many people completely defaulted on a debt, e.x. a student loan, a medical bill, or an insurance premium. We’ve even had debt collegectors sicced on us for occasional late payments even though we always pay the debt. There are tines when we are forced to wait until the paycheck is deposited before making out the bills. So, I guess that puts us on the debt map after all.
Cap’t Jack

Sounds like you might be assuming they’re simply “choosing” to not pay the $25. There was a time in my life when $25 was all I had to live on for a week…WITH a wife and child and a job. It’s really a rigged game against people who don’t have much. A checking account is a perfect example. I remember days when we’d scrimp and save to get maybe 50 in checking. Then we’d write a check for groceries say AND the bank would charge some effin fee so the check would bounce. THEN they’d charge like $30 bounced check fee on a $25 check! To me that’s evil and scum-sucking behavior. But that’s life under capitalism…profit before people.

Of course I don’t know the specifics of all these cases but we have had a fair number of twenty somethings with good jobs living with mom and dad who completely ignore a bill for the $25 copay they didn’t have cash or check to pay with when they were in the office.
Obviously there are going to be a fair number of hardship cases but some areas had default rates as high as 49%. It seems hard to believe that such a high proportion of the population is living paycheck to paycheck and even scarier if its true. Some of these defaults are a matter of choice rather than necessity.

It appears that many don’t have any real financial awareness. They know they need money to buy stuff, but if they get the stuff or services without paying, then it’s on to the next activity, and they see no connection with what they got and a debt.
Reminds me of my dentist when I was much younger. He was Hungarian and did the dental work for the Hungarian movie people such as the Gabor family. He commented that for most patients he required payment as soon as the work was done, but with his fellow Hungarians he demanded they pay before he started work. :slight_smile:
Occam

Of course I don't know the specifics of all these cases but we have had a fair number of twenty somethings with good jobs living with mom and dad who completely ignore a bill for the $25 copay they didn't have cash or check to pay with when they were in the office. Obviously there are going to be a fair number of hardship cases but some areas had default rates as high as 49%. It seems hard to believe that such a high proportion of the population is living paycheck to paycheck and even scarier if its true. Some of these defaults are a matter of choice rather than necessity.
At least for copays, you could insist they pay in advance. I am always asked to pay copays up front. I've never asked if I could be billed., so I don't know if it would be possible. Have you ever tried telling your patients that copays must be paid upfront, perhaps with a prominent sign on the front desk to that effect? You could also refuse to make appointments with anyone with an outstanding balance for more than such and such a time. This could be told to the patients verbally, or with the same sign that says they must pay upfront. Some will be miffed, but most will go along with it. Hard cases can be discussed. But if they take advantage, you would be better off without them as patients. Sometimes even doctors have to get tough. Lois

I was surprised about a story in the news yesterday about Germany. It stated that over fifty percent of the Germans are negative in their net worth. And all I hear is about how strong and rich the Americans and Germans are.

Sounds like you might be assuming they're simply "choosing" to not pay the $25. There was a time in my life when $25 was all I had to live on for a week...WITH a wife and child and a job. It's really a rigged game against people who don't have much. A checking account is a perfect example. I remember days when we'd scrimp and save to get maybe 50 in checking. Then we'd write a check for groceries say AND the bank would charge some effin fee so the check would bounce. THEN they'd charge like $30 bounced check fee on a $25 check! To me that's evil and scum-sucking behavior. But that's life under capitalism...profit before people.
I was in a similar situation for many years. Though I managed to pay evrry debt sooner or later, I was often harassed for small sums that I had had to put off paying. It is an unfortunate situation and I don't know the answer. It's not just capitalism. People get screwed by circumstances in socialist countries, too. Presumably, if you were in dire straits you could have received some welfare, even in the US. Lois
I was surprised about a story in the news yesterday about Germany. It stated that over fifty percent of the Germans are negative in their net worth. And all I hear is about how strong and rich the Americans and Germans are.
So much is done on credit, though for many years debt was tightly controlled in Germany, certainly much more than in the US. People had a hard time getting credit cards and they usually had low limits. I don't know if things have changed in that area. Lois
http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN&hpt=hp_t2 As a business owner I deal with people who refuse to pay their bills on a daily basis. From my own experiences I am frequently amazed that some people who are gainfully employed are perfectly willing to go in to collections rather than pay something as small as a $25 debt. I am guessing that a lot of these people are of the impression that if they ignore a bill long enough it will eventually just go away and this is now they manage their finances. Still one third in collections seems like an awfully high number. Hard to believe and a bit scary too.
One way it can be artificially inflated is medical bills. Nearly all hospitals send all their accounts to a collection service now no matter how small.
http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN&hpt=hp_t2 As a business owner I deal with people who refuse to pay their bills on a daily basis. From my own experiences I am frequently amazed that some people who are gainfully employed are perfectly willing to go in to collections rather than pay something as small as a $25 debt. I am guessing that a lot of these people are of the impression that if they ignore a bill long enough it will eventually just go away and this is now they manage their finances. Still one third in collections seems like an awfully high number. Hard to believe and a bit scary too.
One way it can be artificially inflated is medical bills. Nearly all hospitals send all their accounts to a collection service now no matter how small. Good point MzLee! I also wonder how much of that "bad debt" is from identity and credit card fraud. They really need to fully explain their numbers. Makes for an eye catching headline though, don't it?
http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN&hpt=hp_t2 As a business owner I deal with people who refuse to pay their bills on a daily basis. From my own experiences I am frequently amazed that some people who are gainfully employed are perfectly willing to go in to collections rather than pay something as small as a $25 debt. I am guessing that a lot of these people are of the impression that if they ignore a bill long enough it will eventually just go away and this is now they manage their finances. Still one third in collections seems like an awfully high number. Hard to believe and a bit scary too.
One way it can be artificially inflated is medical bills. Nearly all hospitals send all their accounts to a collection service now no matter how small. I dont think that inflates the issue. If you owe money its a debt. You dont get to forget about it just because its small and you don't have a right to expect the debtor to just let you off the hook. i think that is part of the problem we are having. People seem to think "Oh its just $20, they'll forget about it so I dont have to actually pay it"
Of course I don't know the specifics of all these cases but we have had a fair number of twenty somethings with good jobs living with mom and dad who completely ignore a bill for the $25 copay they didn't have cash or check to pay with when they were in the office. Obviously there are going to be a fair number of hardship cases but some areas had default rates as high as 49%. It seems hard to believe that such a high proportion of the population is living paycheck to paycheck and even scarier if its true. Some of these defaults are a matter of choice rather than necessity.
At least for copays, you could insist they pay in advance. I am always asked to pay copays up front. I've never asked if I could be billed., so I don't know if it would be possible. Have you ever tried telling your patients that copays must be paid upfront, perhaps with a prominent sign on the front desk to that effect? You could also refuse to make appointments with anyone with an outstanding balance for more than such and such a time. This could be told to the patients verbally, or with the same sign that says they must pay upfront. Some will be miffed, but most will go along with it. Hard cases can be discussed. But if they take advantage, you would be better off without them as patients. Sometimes even doctors have to get tough. Lois I didn't mean to make this a discussion about my particular situation but we do request that everyone pay their copay at the time of visit. It illustrates another recent phenomena though. We don't accept credit card payments because the ever decreasing insurance reimbursements and the fact that I am a one person office makes doing so uneconomical( the fees are just too high) and creates additional work ( we would have to balance the credit statement against our accounts each month and that takes added time). We require everyone to pay with check or cash and since the copay is usually only about $25 this does not seem like an unacceptable request. In the past it was not a problem but in recent years people have become ever more reluctant to part with cash and many claim that they don't have even that small amount on them. They may just be bluffing but its becoming obvious that more and more people especially the under 30 crowd actually walk the streets with little to no cash in their pockets putting even the smallest purchases like a cup of coffee on plastic. This may be part of the reason so many people are accruing extra debt. Its easy to get in over your head when everything is on plastic, even your morning donut.
http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN&hpt=hp_t2 As a business owner I deal with people who refuse to pay their bills on a daily basis. From my own experiences I am frequently amazed that some people who are gainfully employed are perfectly willing to go in to collections rather than pay something as small as a $25 debt. I am guessing that a lot of these people are of the impression that if they ignore a bill long enough it will eventually just go away and this is now they manage their finances. Still one third in collections seems like an awfully high number. Hard to believe and a bit scary too.
Those people who make statements such as, "It's just $25" must only think about themselves because anyone thinking rationally and ethically toward others would realize if the business owner suddenly excused everyone owing "just $25" that it the amount would add up fast and to such and likely be a huge sum.

I wonder how many of those, “it’s just $25” people would have the same response if their company just happened to leave $25 out of their paychecks?
Occam

I wonder how many of those, "it's just $25" people would have the same response if their company just happened to leave $25 out of their paychecks? Occam
Companies are the main debt collectors (not by choice) and the government is the main creditor. Child support, back taxes, court orders, etc… The most any employer can take from a paycheck by law is 50% total including taxes all taxes, union dues and insurance. And there are more people in that category than one would think.
Of course I don't know the specifics of all these cases but we have had a fair number of twenty somethings with good jobs living with mom and dad who completely ignore a bill for the $25 copay they didn't have cash or check to pay with when they were in the office. Obviously there are going to be a fair number of hardship cases but some areas had default rates as high as 49%. It seems hard to believe that such a high proportion of the population is living paycheck to paycheck and even scarier if its true. Some of these defaults are a matter of choice rather than necessity.
At least for copays, you could insist they pay in advance. I am always asked to pay copays up front. I've never asked if I could be billed., so I don't know if it would be possible. Have you ever tried telling your patients that copays must be paid upfront, perhaps with a prominent sign on the front desk to that effect? You could also refuse to make appointments with anyone with an outstanding balance for more than such and such a time. This could be told to the patients verbally, or with the same sign that says they must pay upfront. Some will be miffed, but most will go along with it. Hard cases can be discussed. But if they take advantage, you would be better off without them as patients. Sometimes even doctors have to get tough. I didn't mean to make this a discussion about my particular situation but we do request that everyone pay their copay at the time of visit. It illustrates another recent phenomena though. We don't accept credit card payments because the ever decreasing insurance reimbursements and the fact that I am a one person office makes doing so uneconomical( the fees are just too high) and creates additional work ( we would have to balance the credit statement against our accounts each month and that takes added time). We require everyone to pay with check or cash and since the copay is usually only about $25 this does not seem like an unacceptable request. In the past it was not a problem but in recent years people have become ever more reluctant to part with cash and many claim that they don't have even that small amount on them. They may just be bluffing but its becoming obvious that more and more people especially the under 30 crowd actually walk the streets with little to no cash in their pockets putting even the smallest purchases like a cup of coffee on plastic. This may be part of the reason so many people are accruing extra debt. Its easy to get in over your head when everything is on plastic, even your morning donut. It may be worthwhilw in the long run to accept credit cards. A lot of people have them and woukd use them but cry poverty if they have to part with cash (younger people, especially). That way you don't have to contend with billing and collecting, which can be more expensive, and certainly more annoying, than credit card fees. I have never had a doctor or other health care provider refuse a credit card and I always pay by credit card. I would probably be caught short if I had to pay with cash. Checks, too, can cause problems and expense for the provider. Lois