Can a Doctor's Note Waive a Credit Card Fee?

If you miss a credit card bill payment while you’re dealing with an illness, some companies might waive your late fees.

But don’t count on it if you owe more than you can afford.

Bernice Bidwell, for example, had a heart attack and pneumonia in December 2007. The 87-year-old had to spend abound a week in a hospital in San Francisco, then a month recovering in a convalescent facility.

While bedridden, she missed a payment on her GM card (Stock Quote: GM) and incurred a $29 late fee as a result.  When she called and explained that she’d been to the hospital, they agreed to waive it.

“They just said, ‘OK, we’ll take it off,'” Bidwell says. “They were very nice.” Now she’s set up automatic bill pay for most of her cards and gets help with her finances from a geriatric care worker that she found through her daughter’s business, Eldercare Services.

Cindy Savio, a spokeswoman at HSBC Finance Corp. HSBC Holdings (Stock Quote: HBC), which manages GM cards, says she can’t discuss specifics about client accounts for privacy reasons.

Medical Emergencies Do Not Guarantee Waived Fees

As the population ages, more people like Bidwell will likely make delayed payments because of an illness or senility. Despite the growing number of elderly cardholders, laws don’t explicitly protect debtors from fees incurred due to illness.

"The reason you fall behind is utterly irrelevant to the creditor," says Michelle Weinberg, supervisory attorney of the Chicago Seniors/Consumer Law Project. "It's legally irrelevant whether you lose your job or you lose your mind." Or have a medical emergency.

But It Never Hurts to Ask
If you make a late payment, but have a medical excuse, state your case. According to Robert Hammer, chief executive of the bank card advisory firm R.K. Hammer, if someone who has always been a good credit card customer gets hit with late fees for health reasons, solving the problem is simply be a matter of telling the card company and providing documentation from a doctor to prove it.

"It'd be cold-hearted to say, 'Sorry, you're getting the fee and we'll ding your record anyway,'" Hammer says. "I can't imagine any prudent banker doing that."

He adds that it would be harder to make such a case if the person had missed payments for many months.

Legal aid lawyers, whose clients are typically mired in so much debt that haggling involves serious money, say the creditors they work with aren’t merciful about late payments due to illnesses or anything else.

“I’ve never seen a card company go easy on a person,” says Jennifer Schultz, an attorney in the consumer/housing unit at Community Legal Services of Philadelphia.

For example, Schultz's program has a client in her 70s who suffers from diabetes. The woman, who asked for anonymity, had been working as a nurse on a contract basis, but then needed her leg amputated.

While she was hospitalized from Sept. 9 to Oct. 9, 2008, her debt bills kept piling up. Unable to work as she struggled with her illness, she couldn’t get by on her $1,400 per month income from social security while facing $1,800 per month in mortgage payments and many thousands of dollars in credit card debt.

When Patty McGlone, a social worker at Community Legal Services of Philadelphia, wrote letters to the woman’s numerous creditors explaining about her illness, only one responded, offering to work something out if she put up $500 first. The woman didn’t have that amount.

“She worked all her life and now she’s only a few steps away from homelessness,” McGlone says.

Planning Ahead Can Save You Money
Richard S. Daniels, owner of the Boston collection firm Daniels Law Offices, P.C., pointed out that in “real life,” people end up struggling to repay several bills, and may be hounded by agencies and sued several times. Family or social workers get involved. In 40 years, Daniels has closed hundreds of thousands of cases, and he’s never seen one in which an illness was the only reason somebody got into debt trouble.

“It’s more complex than you’d like to posit,” Daniels says. “But if you want an answer, our firm would go back to the client [a creditor] and say 'Look, this is the situation and you need this worked out.’”

What can you do to protect yourself or a loved one from the possibility of missing debt payments due to illness?

Lauren Young, a licensed clinical social worker who coordinates the helpline for the southeast Florida chapter of the Alzheimer’s Association, suggests having everyone in your family do a financial checkup, when each person discusses who would take care of what finances during a time of illness. That way, you won’t have to single out anyone.

“Plan ahead,” Young says. “Don’t wait until the person loses capacity.”



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