Understanding the Length of Time a Collection Agency Can Collect on a Medical Bill

In the United States, the duration a collection agency can pursue unpaid medical bills is regulated by state-specific laws regarding the statute of limitations. This period can vary from three to six years, but in some states, it may extend beyond this range. It is crucial for individuals to be aware of the applicable statutes in their jurisdiction and their rights regarding the debt collection process.

State Laws and Medical Debt

Each state has distinct laws governing the statute of limitations for debt collection, including medical bills. It is imperative to check the specific state laws to understand your rights and obligations. Medical debt is often classified as either an open account or a written contract, which can affect the statute of limitations period.

Debt Acknowledgment and Validation

Acknowledging the debt or making a payment can reset the statute of limitations, providing the collection agency with extended time to pursue collection. Consumers have the right to request validation of the debt from the collection agency. If the debt is disputed and found to be inaccurate, the agency must cease collection efforts and remove the item from your credit report.

Time on Your Credit Report

Medical bills can appear on your credit report as soon as the hospital turns over a delinquent bill to a collections agency, which can happen as early as two months or as late as six months. In most cases, the waiting period for the bill to appear on your credit report is 180 days. The bill will remain on your credit report until it is paid in full by your insurance company or your health care provider.

Dismissing Medical Debt

The statute of limitations for filing a lawsuit regarding unpaid medical debt varies by state. Generally, if the debt is six months overdue, a collection agency must file for bankruptcy within three years. However, in some states, you can appeal a collection agency's decision and request that your medical bill be removed from your credit report. It is possible to have your medical debt dismissed from your credit report if the agency wrongfully sued you.

Final Considerations

The statute of limitations for medical debts is specific and often more favorable to the consumer than other types of debt. For instance, most other debts remain on credit reports for seven years, but medical debts typically remain for 180 days. You are entitled to check your credit report once a year for free from each of the three major credit bureaus. Additionally, you can dispute any inaccurate or fraudulent medical debt listings with the consumer reporting agencies. Regularly checking your medical bills and ensuring they align with your medical care and insurance coverage is crucial.

Conclusion

To navigate the complex landscape of medical debt and collection agencies, it is wise to consult with a legal professional or a consumer protection agency. They can offer tailored advice based on your specific circumstances and ensure you are not unnecessarily burdened by medical debt.