Can Debt Collectors Sue For Medical Bills – If you don’t pay your medical bills, your healthcare provider can sell the debt to a collection agency, which can then try to collect the debt.

However, medical debt does not necessarily affect your credit score, even if it goes to a debt collection agency. As of July 1, 2022, paid medical debt that was in collections will not appear on credit reports. Plus the time it takes for unpaid medical debt to show up on your credit reports has been extended to a year, giving you additional time to pay it off before it affects your credit. Also, in the first half of 2023, the major credit bureaus will not include any medical debt in collections under $500 on credit reports.[1]

Can Debt Collectors Sue For Medical Bills

Can Debt Collectors Sue For Medical Bills

In this post, we’ll go over what happens to a medical bill you haven’t paid, how it affects your finances, and what to do if you can’t afford your medical bills.

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If you don’t pay your medical bill, your medical provider will try to collect on what you owe. If they can’t collect it after a few months, they can sell your debt to a debt collector.

How unpaid medical bills become medical debt, and what happens to that debt once it goes to collections, usually goes like this:

Health care costs can be very high. Some medical bills can even be unexpected, like emergencies you couldn’t have planned for. Regardless of the situation, there are steps you can take to mitigate the cost of your medical bills, whether it’s new medical expenses or old bills that end up in collections.

The first step in handling your medical bills is to check the bills for accuracy. Make sure your personal information, such as your name, address and health insurance information, is correct, and that the correct treatments and services are listed, including whether your care is considered in-network or outside your insurance coverage.

What Is Exempt From Debt Collection?

If you find any errors, you will want to contact your medical provider or your health insurance company to remove the incorrect information and adjust the bill as needed.[4]

If your bill is inaccurate, collect evidence from your bills, your receipts for payment, your insurance agreement and your medical provider and note where there are errors. You can dispute these inaccuracies with both the provider and your insurance company if the amount you are charged is incorrect.[5]

Just because your insurance company initially denies a medical care claim doesn’t mean they definitely won’t cover it. You have a right to an insurance appeal. If you feel that a procedure or other care expense should fall under the scope of your insurance coverage, you can ask your insurance company to reevaluate their decision about payment or benefits.[6]

Can Debt Collectors Sue For Medical Bills

Depending on where you live, what your income level is and the amount of your medical bill, you may qualify for financial assistance programs. Many programs seek to serve the uninsured, low-income individuals and more. Here are some financial assistance options you may be eligible for:

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If your medical bill has not yet gone to collections, you can contact your provider directly to negotiate the bill if it is more than you can afford.[5] Some providers may be willing to settle the bill for a smaller amount, while others may be more flexible about the amount of time it takes you to pay them.

If you can’t afford to pay a lump sum upfront, you can try discussing payment plan options with your provider’s billing department. You may qualify for an interest-free plan or an income-driven hardship plan.

You can also ask if your provider knows of resources that offer financial assistance for common medical costs, such as prescription drugs or other medical expenses, to show them that you want to avoid collections if possible. They may be willing to work with you, so it never hurts to ask.[5]

If debt collectors have started contacting you about your unpaid medical bills, they must send you a debt collection confirmation notice that tells you what you owe.[9] If they don’t send you a debt collection validation notice within five days of contacting you, you should verify with them that the account is accurate by requesting that they send you a debt validation letter if they don’t have one. You can write a debt verification letter asking for information specific to the debt you owe.[3]

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As a patient you have rights. Here are some federal protections in place for patients and what they mean for you and your medical debt.

Likewise, you have rights as a consumer that protect you from debt collectors. Debt collectors can try to take advantage of you if you don’t know your rights about what they can and can’t do. If a debt collector does something they are not allowed to do when collecting your debt, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).[12]

Here’s an overview of what debt collectors can and can’t do, as outlined in the Fair Debt Collection Practices Act:

Can Debt Collectors Sue For Medical Bills

Also, be on the lookout for scammers who try to pretend to be debt collectors. Never give your personal information or send money to a debt collector unless you have verified that they are a legitimate debt collection agency.

What To Do When You Get A Surprise Medical Bill You Can’t Afford

Some medical debt may still appear on your credit history, affecting your credit score. However, the three major credit bureaus – Experian, Equifax and TransUnion – have announced the following changes to medical debt reporting:

Debt doesn’t go away until it’s paid.[3] No matter what your personal financial situation is, have tools to help you get back on track. Whether you’re working to pay off debt in collections, or want to build your credit, we can provide you with the resources you need.

Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a bilingual author and personal finance educator dedicated to helping populations in need of financial literacy and counseling. Her insightful articles have been published in various news outlets and websites, including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal finance and motivation website and translated the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP, into Spanish. Ana teaches Spanish or English courses in personal finance on behalf of the W!SE (Working In Support of Education) program has hosted workshops for nonprofits in NYC.

Our goal is to provide readers with current and unbiased information on credit, financial health and related topics. This content is based on research and other related articles from reliable sources. All content at is written by experienced contributors in the financial industry and reviewed by an accredited person(s).

Times You Can Sue A Debt Collector

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By submitting my information, I agree to its Terms of Service, Consent to the Use of Electronic Documents and Signatures, Privacy Policy, Consumer Report Disclosure and Customer Identification Program. Nebraska collection agencies file tens of thousands of lawsuits each year thanks to cheap lawsuits and loose rules that leave the poor and sick vulnerable.

Two years ago, the president of Credit Management Services, a collection agency in Grand Island, Nebraska, gave the keys to a used 2007 Mercury Grand Marquis to a struggling local family. To commemorate the donation, the company held a ceremony that concluded outside its offices, where the couple and their two young daughters were able to test drive their new car.

Can Debt Collectors Sue For Medical Bills

The family’s story was horrific: their eight-year-old daughter’s failing kidney led to multiple surgeries and a deluge of medical bills, according to an article in the local newspaper.

Medical Debt On Credit Report Will Disappear

But CMS played another role in the family’s life, one that the article did not mention. The company previously sued the couple eight times over unpaid medical bills and garnished both of their wages. As recently as two weeks earlier, CMS had seized $156, a quarter of the girl’s father’s salary.

Shortly after the ceremony, CMS released the family from further seizure, court records show. But just four months later, the company filed a motion to restart. The couple, who did not respond to attempts by ProPublica to contact them, have since declared bankruptcy.

In almost any other state, such a flood of lawsuits against a family in desperate financial need would be remarkable. Not in Nebraska. There, debt collectors routinely sue over medical debts as small as $60 and a simple missed doctor’s bill can quickly land you in court.

Filing a lawsuit is one of the most aggressive ways to collect debt, but no one keeps track of how often it happens or to whom. However, an examination of Nebraska’s courts shows that where debtors live has an enormous, and unexpected, impact on the amount and

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