DeLand church pays off debt for thousands

In the coming weeks, some 6,500 people in five Central Florida counties will get a letter in the mail telling them the crippling medical debt they owe has been paid off, no strings attached.

It’s not a scam. It’s an act of faith worth $7.2 million to the struggling families.

“It’s one thing for us to say, ‘God loves you,’” said senior pastor Dan Glenn of Stetson Baptist Church in DeLand, whose congregation donated enough to buy off the medical debt for low-income residents in Volusia, Lake, Putnam, Marion and Flagler counties. “It’s another for us to show that.”

On June 30, the church took up a special offering designed to be given away entirely to the community. Because it budgets on a fiscal year starting July 1, and because 2018-2019 happened to have 53 Sundays instead of the more common 52, Stetson Baptist had already raised enough through Sunday collections to cover its annual operating expenses.

Instead, leaders set a goal of raising $48,000 to divide between two nonprofits: One More Child, a faith-based provider of foster homes for children, and RIP Medical Debt, which buys selected medical debt from health-care providers and debt collectors — typically at one penny on the dollar — and then uses donations to pay off the bills.

Glenn figured his congregation could raise enough to cover one foster home for a year and pay off the medical debt of every Volusia County resident living near the federal poverty level.

But when all the contributions had been tallied, the 350 or so churchgoers that Sunday had donated a collective $153,867.19 — enough to fund three foster homes for a year and to pay off the medical debt for all impoverished residents in Volusia as well as four surrounding counties.

“It was awesome,” Glenn said.

“I can’t wait for some of those families to receive a letter that says: ‘Your debt has been forgiven.’”

“I think it will relieve that mental burden of owing money,” said church member Robbie Harper. “Finally, they won’t have to worry.”

Stetson Baptist leaders got the idea to buy off the medical debt after hearing about a church in Kansas that had done it. As it turns out, so have other churches, a nurses’ association in Michigan, a pair of Pensacola High School students, and comedian John Oliver of Last Week Tonight, who did it during a televised sketch on the medical debt collectors.

Medical debt is a leading cause of financial disaster in the U.S. A study published early this year in the American Journal of Public Health found that twothirds of people who file for bankruptcy cite medical issues as a key contributor, even when they had insurance.

Hospitals and other health-care providers typically sell their uncollected debt to collectors for pennies on the dollar, hoping to recoup at least a fraction of what they’re owed. The debt collectors then try to get patients to pay the full bill — plus interest and fees.

“For the most part, hospitals don’t have the infrastructure to pursue the debt they have on the books,” said Daniel Lempert, director of communications for RIP Medical Debt. “More and more they’re outsourcing it. Sometimes it gets sold several times before it comes to us. We only buy debt for those who are the least likely to be able to pay.”

Specifically, that means people who earn two times the federal poverty limit or less (no more than $51,500 for a family of four), owe more than they have in assets, and for whom the debt amounts to more than 5 percent of their annual income. People can’t apply to have their debt paid; they are selected only if they meet the criteria

But unlike for-profit debt collectors, RIP uses donations to cover the debts, and because the charity buys the debt at a steep discount, each donation goes a long way. Stetson Baptist’s $72,000, for instance, paid off $7.2 million in debt, with RIP taking no cut of the money for its own expenses.

“The concept is deceptively simple,” Lempert said. “But sometimes people think it’s not real. They think it’s too good to be true.”

For beneficiaries, it can be life-changing. Medical debt can ruin credit scores and prevent people from getting loans, leasing a car, renting an apartment or even landing a job. And that’s to say nothing of the stress it can cause.

The beneficiaries of Stetson Baptist’s donation are just beginning to be notified, and because of federal privacy laws, their names can’t be released.

But, eventually, the church will know the largest debt, the average debt per family and the exact number of families.

“I can’t even begin to imagine the impact this will have for people,” Glenn said. “I don’t know what the rest of their life might be like. But what I do know is that, in this one area of significant burden, they’re going to be able to say: ‘I’m free.’”