My medical bill went to a collection agency. Can I pay it directly to the hospital?
Short Answer Collections agencies and the businesses they collect for are two different animals. If you don't want this to hurt your credit I suggest you deal directly with the hospital. Pay the bill, but prior to paying it get something in writing that specifically says that this will not be reported onto your credit. That is of course if the hospital even lets you pay them directly. Usually once something is sold to a collections company it's written off.  Long Answer Credit reports are kind of a nightmare to deal with. The hospital just wants their money so they will sell debt off to collections companies. The collections companies want to make money on the debt they've bought so they will do what ever it takes to get it out of you, including dinging your credit report. The credit bureaus are the biggest nightmare to deal with of all. Once something is reported on your credit history they do little to nothing to remove it. You can report it online but this is a huge mistake because when you report online you wave your rights to sue the credit bureaus if they don't investigate the matter properly. This of course leads to massive amounts of claims being under investigated.  So what are your options once something hits your credit history? I know this all sounds bleak but the reason I go into such depth is that they likely have already reported it to the credit bureaus and you just don't see it reported yet. Good luck to you. Get a bottle of aspirin.
I fell into a similar situation as you.  I spent a lot of time trying to understand this, and the instructions leave a lot to be desired.  What follows is my ultimate decisions, and my rationale.  My taxes have already been filed, so I will let you know if I get audited! 1.)  So in cases like this I try to understand the intent.  In this case section III is trying to understand if pre-tax money was added to your HSA that you were not entitled too.  As you describe, this does not apply to you.  I would think you should be ok not including section III (I didn't.) HOWEVER, I am not a tax-lawyer or even a lawyer!   2.) I do not believe these are medical distributions From the 8889 doc....   Qualified HSA distribution.   This is a distribution from a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) that is contributed by your employer directly to your HSA. This is a one-time distribution from any of these arrangements. The distribution is treated as a rollover contribution to the HSA and is subject to the testing period rules shown below. See Pub. 969 for more information.   So I don't think you have anything to report here.   3.) As you have no excess this line can just be zero.   4.) From the 8889 doc This is a distribution from your traditional IRA or Roth IRA to your HSA in a direct trustee-to-trustee transfer.   Again, I don't think this applies to you so you can enter zero. 5.) This one is the easiest.  You can always get this money tax free if you use it for qualified medical expenses. From the 8889   Distributions from an HSA used exclusively to pay qualified medical expenses of the account beneficiary, spouse, or dependents are excludable from gross income. (See the line 15 instructions for information on medical expenses of dependents not claimed on your return.) You can receive distributions from an HSA even if you are not currently eligible to have contributions made to the HSA. However, any part of a distribution not used to pay qualified medical expenses is includible in gross income and is subject to an additional 20% tax unless an exception applies.   I hope this helps! Rule of thumb, the earlier you pay down your balance, the less interest you will accrue and the faster you will pay off the debt as a whole. But lets play with some real numbers here.  You cited $5000 balance and a $750 payment, but with various bills and things adding onto the balance over the course of a month. Now if your purchases and payments add up to the same number, you are in a losing game, so for the sake of argument I am going to say you are putting $500 + interest on the card each month and making a $750 payment.  We also need an interest rate to work with, I am going to use 1%/month and 30 day months to keep the math a bit easier to follow.   You basically have two choices in this scenario, you can pay 750 a month on the card, then use it to make your $500 in purchases/other payments over time as you suggest in your question.  Or you can pay $250, and hold back $500 to make those other payments directly without running them through the card, as has been suggested in some other answers. So let us compare the two... If I start the cycle at $5000, make a $250 payment on the first day of the cycle, then have no other activity, I will have a balance of $4750 for the month and accrue $47.50 in interest at the close of the cycle.  Balance going into the next period is now $4797.50.  Carry this out for a year, and your balance at the close of the 12th cycle is $2431.79, and $431.79 of your payments went to interest. By contrast, if you pay $750 at the start of the month, then add $100 back every 6 days so that you spend $500 over the course of the cycle. You will have an average daily balance of $4466.67, which results in $44.67 in interest charges being accrued at the end of the month.  This gives you a balance of $4794.67 going into the next cycle, putting you about $3 ahead of the previous method.  Push this pattern out for a year and your ending balance is 2395.86, with 395.86 going to interest.  Resulting in a savings of ~$36 over making the smaller payment and paying cash for your other expenses.  If this happens to be a rewards card, you also have gained whatever rewards benefit it gives you. This demonstrates that by the strict numbers game, the scenario you propose should come out a small but measurable distance ahead of making a smaller payment in order to avoid putting things back on the card.  So why do so many people adamantly advise you to not do this?   Most of it has to do with psychology and risk.  The cash method does not leave any room for you to over spend.  You have shredded or locked up the credit card so it can’t be used casually, and when you run out of cash, you can’t spend any more.  Which forces you to pay much closer attention to where your money is going.   When you are running things through the credit card, you generally don’t have that hard stop unless you are up against your credit limit, and even then most issuers are quite happy to let you go over and charge you extra fees for doing so.  So if you have this plan where you are intending to put $500 on the card in a month, then lose track of something you did early in the month, and inadvertently spend $800, you are digging yourself deeper into the hole instead of climbing your way out. There is also a risk in terms of income loss.  In the cash method, you no longer have the money to spend, and you are forced to make the hard decisions about where to allocate what you do have, making you much more likely to cut back on luxury items to preserve the necessities.  In the card method, it is easy to say “eh, the card has room, I can catch up again later” and not realize the mess you are causing yourself until you are in way over your head.  I personally have run all my bills through a credit card in the past so that I could have one single payment to make.  Then I was unemployed for six months, and ended up moving before I found a new job.  Everything in between, including the move, went on the card.  Next thing I know I am carrying a balance of $15k where I used to always have it paid in full.  It took roughly 10 years, including several years of working strictly in cash, to get that back under control. I currently have a card that is carrying a balance, and I am running select expenses (such as fuel and food) through it while I whittle the balance back down.  Most of my main bills are still paid directly from cash, specifically so that I don’t fall back into the same trap I did before.  Even so, there were several months in the past year where the balance was creeping up instead of down, because we were not paying that close of attention to our spending.   Then my wife lost her job, and it forced us to closely evaluate where our money was going.  We still run certain things through said card, but we are much stricter about it being only those select things, and the balance is trending down again.  The main reason we are still channeling those expenses that way is because this is a cash back reward card, and we will be getting roughly $1000 back here in a couple more months. "Michael McGowan's answer is correct. The HDHP is like conventional insurance -- it is not like a ""health care plan"" that we're all used to. I.e. you don't want to have it pay out -- if it pays out, something bad has happened to you. (Just like you hope to never make a claim on your homeowner's, disability, or AD&D insurance -- that means something bad happened to you.) There are minor exceptions -- some HDHPs may cover preventive care, immunizations, etc to some extent. The bonus in the case of the HDHP is that you get to put money to cover the deductible into a tax deferred account. The HSA is effectively a self insurance fund with the HDHP as backup. Here's a concrete example. Say you have an HDHP with a $2500 deductible. The monthly premium is $500. You put $3000 into your HSA. Scenario 1: You remain mostly healthy throughout the year. You have a single doctor's visit, the doctor's office submits a claim to your insurance. The insurance doesn't pay because you haven't met your deductible, and you get a bill for $150. You write the doctor a check for $150 out of your HSA. Here, you've spent $6000 on your HDHP premiums, contributed $3000 to your HSA, and spent $150 of that on health care. At the end of the year, your HSA balance is $2850. In the following year, assume you plan to contribute another $3000 to your HSA. You can increase your deductible on the HDHP to $5000 (since you'll have $6000 in your HSA to cover out of pocket costs) and your monthly premium might go down to $400. Scenario 2: You are hospitalized for a week. The hospital submits a $15000 claim to your insurance. The insurance pays $12500 since your deductible is met after $2500. The hospital sends you a bill for $2500 for the balance. You write a check to the hospital out of your HSA. Again, you've spent $6000 on your HDHP premiums and contributed $3000 to your HSA. At the end of the year, your HSA balance is $500. Scenario 3: You are hospitalized for two days in December 2011, and then again for two days in January 2012. Your deductible reset on January 1, 2012. The hospital submits two claims to your insurance: one in 2011 for $5000 and one in 2012 for $5000. The insurance company pays $2500 on the first one and you get a bill for the other $2500. Same thing for the second one -- you've got to meet the deductible all over again. You write the hospital a check from your HSA to pay the first one. Then you've only got $500 left in your HSA. But you were planning to make another $3000 HSA contribution for 2012 anyway, so you make the contribution, write a $2500 check to pay the second bill, and you've now got a balance of $1000 in your HSA -- and since you've met the deductible for 2012 you should have no more out of pocket expenses. (Assuming your plan doesn't have copays.)" You signed a contract to pay the loan.  You owe the money.   Stories of people being arrested over defaulted student loans are usually based in contempt of court warrants when the person failed to appear in court when the collection agency filed suit against them. Explore student loan forgiveness program. Research collections and bankruptcy and how to deal with collection agencies.  There are pitfalls in communicating with them which restart the clock on bad debt aging off the credit report, and which can be used to say that you agreed to pay a debt.  For instance, if you make any sort of payment on any debt, a case can be made that you have assumed the debt.  Once you are aware of the pitfalls, contact the collection agency (in writing) and dispute the debt.  Force them to prove that it is your debt.  Force them to prove that they have the right to collect it.  Force them to prove the amount.  Dispute the fairness of the amount.   Doubling your principal in 6 years is a bit flagrant.   So, work with the collectors, establish that the debt is valid and negotiate a settlement.  Or let it stay in default. Your credit report in the US is shot.  It will be a long time before the default ages off your report.  This is important if you try to open a bank account, rent an apartment, or get a job in the US.  These activities do not always require a credit report, but they often do.  You will not be able to borrow money or establish a credit card in the US. Here's a decent informational site regarding what they can do to collect the loan.  Pay special attention to Administrative Wage Garnishment.  They can likely hit you with that one.  You might be unreachable for a court summons, but AWG only requires that the collectors be able to confirm that you work for a company that is subject to US laws. Update:  I am informed that federally funded student loans are not available to international students.  AWG is only possible for debts to the federal government.  Private companies must go through the courts to force settlement of debt.  OP is safe from AWG. Yes you can do this yourself.  I cannot speak for all the credit repair companies, but generally they are not reputable.  Even if they are trustworthy, they cannot do anything you cannot do yourself. Freeze your credit.  Lock it down and prevent any new activity.  This is for safety and I want you to do it so you know where you stand. Get a copy of your free copies of the three credit reports from https://www.annualcreditreport.com/ (this is the only free, official place to get your reports) Sign up for a free credit score estimation site like http://www.CreditKarma.com or http://www.CreditSesame.com  (These sites make money by selling affiliate offers, but you can easily ignore them)  You can't get your exact FICO score, but they letter grades they provide help you understand where you stand. Dispute anything that is not accurate.  Get wrong items corrected with the credit agency. Ignore collectors who are not showing up on your report.  If they aren't reporting you, so what?  Let your own moral compass be your guide if you pay those debts or not. Negotiate a payment amount with the debtors you owe.  If you are dealing with a debt collector, there isn't any point in paying the full amount.  You owed the money to somebody else, and they sold it to the debt collector, therefore in my mind they are as whole as they feel like being.  It is up to you how much you pay, but you are already going to suffer  (and have suffered) the credit ramifications.  No sense in wasting money when they will very likely settle for dimes on the dollar.  Don't let them bully you around.  I suggest understand your rights and protections as offered by the Fair Debt Collection Practices Act Before you pay anybody anything, get it IN WRITING Wait and follow up.  Make sure they report it correctly. I would probably tackle them in order of age, newest first.   Don't bother with debts that are more than, or nearly seven years old.  Anything that old is or will fall off of the credit report soon, and your score will start to rise.  Paying on those debts will refresh them and they will harm you longer.  We can debate the ethics of that advice in the comments, but if you want your score to raise, I suggest just waiting about anything over six years old while you tackle the newer ones. This is a SLOW process.  Your credit score will still take a couple years to heal once you fix your report.  But that is the point of the score after all.  It is a history of how you handle money and debt. You should not pay down the debt in collections until you have a reasonable amount of money to offer as a settlement. The exception is the traffic fines -- you may have legal liability for not paying them. "In general, ""billed amounts"" don't mean a whole lot, since if the provider has a contract with the insurance company (usually called ""in-network""), the insurance company picks what the rates are that the treatment ""should"" cost, and how that cost gets allocated between what the insurance company pays and what the patient pays. Due to that contract, the insurance company and provider should agree on how much the patient owes, and one shouldn't pay a provider more than what the insurance company says you should. On the other hand, some insurance plans have a level of ""out of network"" coverage. In that case, the insurance company has its same sense of what the treatment ""should"" cost, but is really only concerned with paying its share. The EOB then should show how much they pay, but will generally show the full ""billed amount"" minus their payment as the amount the patient owes. That is, since there's no contract between the provider and the insurance company, the insurance company has no way to stop the provider from ""balance billing"" you for whatever they want beyond the amount that the insurance is paying, since any payment amount is purely a transaction between you and the provider. In general (as with anything involving large amounts of money), it's best to get all you can in writing. The provider should be able to provide you with a statement showing zero remaining due, and including both any payment you've made to them and any payments made by the insurance company. It may take a while for the payment from the insurance company to be processed, and until it does there may be something on the statement showing ""estimated amount to be paid by insurance"", which isn't as comforting as one showing ""actual amount paid by insurance"" and ""zero due""." "I don't know the details of whether or not you should pay this money, or who is at fault. But clearly, you believe that you do not owe the money, and the bank investigation seems to agree with you, since they gave you your money back.  Since you have your money, and they haven't sued you, the only issue yet remaining is your credit report. Here is what I would suggest.  First, make sure you check all three credit reports, to see which reports the collection appears on. Then dispute the report with each credit bureau reporting the problem. There is an article on CreditKarma that explains the process. When you file your dispute with the credit bureau(s), they will investigate. This usually involves asking the creditor for proof of the debt, and if you didn't sign anything, they probably won't have any proof. Hopefully, the credit bureaus will come to the same conclusion as the bank did, and remove the collection from your credit reports.  In my opinion, it doesn't make sense to pay them now, if you don't believe you owe it. Paying them won't remove all the bad stuff from your credit report (but it will improve it), and you don't want to pay them and then immediately sue them.  If, however, the credit bureaus side with the landlord and leave this on your report, paying the $300 is better on your report than leaving the ""unpaid debt"" on there."