Consumer Protection Law
Consumer Protection Law Questions? Ask a Lawyer Now.
You need to contact the hospital to clear up the error. If the hospital acts very quickly to clear this up, your credit will not be affected. If the hospital drags its heels and your account is reported as collections account, then that derogatory information would affect your credit score. You can then sue the hospital for ruining your credit. However, you must show damages you have suffered in order to get anything from the hospital.
In the meantime, you need to contact the collections agency and let them know that you are actually on a payment plan for the debt and the amount is being taken out from your bank account every month. DO NOT GIVE YOUR BANK INFORMATION TO THE COLLECTIONS AGENCY.