Medical debt, collections and the fees you’ve probably never heard of

Medical Recover Services - debt collection

IDAHO FALLS — The medical bill was for $518.80. At least, that’s how much she owed in the beginning.

In 2013, Penny Siler was a local school bus driver making about $500 a month and caring for her disabled husband, according to court documents. Little did she know her case would end up in the Idaho Supreme Court — and the ruling would be against her.

It’s not clear why the original bill wasn’t paid or what it was for, but it ended up at Idaho Falls-based Medical Recovery Services. MRS unsuccessfully tried to collect on the debt, but eventually a lawsuit was filed against Siler seeking the money.

When a debt collection lawsuit is filed, a defendant has 21 days to respond. On day 22, if no response has been received, a magistrate judge can rule for a default judgment in favor of the collection agency.

This case was just like that. Siler didn’t show up or file a response, and a judge entered a default judgment against her for $1170.93. That sum includes the original debt, a $350 prejudgment attorney fee, prejudgment interest and filing fees.

Michael Satz, a University of Idaho law professor who has practiced bankruptcy and consumer finance law, says default judgments have become the norm in debt collection.

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