The information provided in this article does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials available in this article are for general informational purposes only.
Are you being sued by a debt collector due to past medical bills? Are you wondering what your rights are?
It is important to determine how old these medical bills are. Why?
Medical Bills Statute of Limitations By State
How Do Medical Bills Statute of Limitations Work?
Doctors and hospitals typically don’t report late payments directly to credit bureaus, but they may eventually send past-due accounts to outside collection agencies. If patients can’t pay the bill, the bill collectors may report the debt to the credit bureaus. The debt can then tarnish patients’ credit files and potentially their credit score, which is calculated based on information in the report.
Hospitals typically are not the ones reporting late payments directly to credit bureaus. However, as time passes, they may send past-due accounts to third-party collection agencies. If the debtor still is unable to pay the medical bills, the third party may report it to the credit bureaus.
What Is The Starting Date?
Does the statute start on the date you went to the care center, got the bill, the date of the bill, etc?
The statute of limitations generally begins when the date of the last payment was made or the date of the last activity on the account.
Would you like an estimated exact date of your medical bills statute of limitations using your state's data such as the picture below including how much your paycheck could be garnished? Use our free statute of limitations and garnishments calculator below.
We believe medical bills are similar to credit card debts which are based on due dates for payments. Payments could include periodic payments (i.e., monthly, weekly, quarterly, etc.) or a lump sum payment. The payment due date is significant because it triggers the “default date.” The default date triggers the beginning of the statute of limitations.
A ”default date” is the first date you miss a scheduled payment. Default means that you failed to make a scheduled payment according to the agreed-upon terms. It is a common misconception that a person is not in default until after a grace period. A grace period is the number of days you have before a late fee is added to the payment. Grace periods vary, depending on the terms in the written agreement.
The important thing to know is that you default on your agreement if you do not make the payment on the date it is due. The grace period only applies to the late fee. The lender agrees not to charge you a fee until you are a specific number of days past your due date.
Most statutes of limitations begin with the “date of harm” to the other party.
For example, you broke your leg in Texas and needed to get surgery to repair any damages. The statute of limitations on medical bills in Texas is four years. Unfortunately, you were struggling and unable to pay the bills so they defaulted. After four years, you are still constantly being contacted and then were threatened to be sued. Because four years have passed, you do not need to worry about this lawsuit. Although you do not have to worry, you do still need to reply. Be sure to include the dates and acknowledge that the statute of limitations has passed.
We built a free Debt Statutes Calculator that can be found below. It can help you identify your state's statute of limitations.
Can Medical Debt Negatively Affect Your Credit Report?
Similar to other debts, medical debt is listed on your credit report, including if you are current or falling behind on them. Unfortunately having medical debt on your credit report can make it difficult to get credit, rent/buy a home, or even find a job.
Oftentimes, people have to face bankruptcy just to face the medical debts they cannot afford. When unpaid medical debts are in collections, they can stay on your record for at least seven years. Once those seven years have passed, it will not be on your credit report unless a judgment has been placed against you in that time.
What Happens If A Debt Collector Sues You For Medical Debt After The Statute of Limitations Has Passed?
As mentioned previously, you do not need to worry if the statute of limitations has passed, however, you should still respond to the lawsuit.
Answer a Lawsuit if you’ve Been Sued
Although you may be hoping if you ignore the lawsuit, it will go away, this is sadly not the case. If you are feeling overwhelmed by
how to answer the lawsuit, follow these steps:
- Respond to the claims listed against you in the case: When you are sued, you will receive documents from the court that will outline the allegations against you. In your reply you have options. You can admit, deny, or deny due to the lack of knowledge of each claim. Be careful when admitting to the claims, as they may take it as you giving proof that you owe it all.
- Review your affirmative defenses: Affirmative defenses are any legal reasons that you should not be responsible for the debt in question. One great example of an affirmative defense would be if the statute of limitations on a medical debt has expired.
- File the Answer before your state’s deadline: Once you have reviewed your answer, be sure to file it before the deadline in your state to avoid a default judgment.
Understand Your Rights Under The Fair Debt Collections Act
Examples of this include:
- Constant phone calls. Especially after you tell them to stop calling.
- Use of obscene or profane language.
- Threat of violence or harm
- Publishing public lists of people who owe them money (reporting to credit bureaus does not count).
- Calling you without disclosing who they are.
- False threats to have you arrested.
- They threaten to sue you if they have no intention of doing so.
- Pretending to be an attorney.
What Can You Do To Resolve Medical Bills?
You may be feeling overwhelmed with what your next steps should be or how you should move forward. There are many options that can be found below.
Get Validation of The Debt
The first thing to do is validate that the bill is even yours and that the expenses are accurate. You do not want to pay for something that is inaccurate. If you have health insurance, contact them for an "explanation of benefits" for clarification on your end. This statement will show proof of your insurer being billed and will help you be able to challenge any bills that seem questionable.
Negotiate and Settle the Medical Bills
If you have confirmed that the bills are yours and the total is correct, one step to take is to call to ask about payment plans.
Negotiating for Less Than is Owed
If you have ever settled consumer debt, settling medical debt is no different. One thing to keep in mind is the possibility that you may have been overcharged for your medical bill. In fact, according to
clearpoint.org, 8 out of 10 medical bills contain errors or fraudulent charges. So in preparing to negotiate, make sure to be familiar with your medical bill — know exactly what it says and look for errors.
The first step is to get into contact with your collection agency. It is not uncommon that, through negotiating, your collection agency agrees to settle for a lower debt. While this is still an option, the chances of a collection agency settling for a lower collection are low. This is simply because they have little to no incentive to do so. Nonetheless, it is still worth the try.
Negotiate Disputed Debts
You might consider disputing your debt if, for instance, your insurance was supposed to pay for it and you were not aware of the debt until it was transferred to collections. If this applies to you, you have 30 days to dispute the medical debt. During this time, the collection agency does not have the right to any debt collection. There is a catch as reporting the debt to credit bureaus does not count as debt collection. If your disputed debt is accepted, you can negotiate for it to be removed from your credit report. For more information on negotiated disputed debts, click
here.
Negotiate for a Lump-Sum or Structured Settlement
Settling medical debt is a viable option that you can consider. A lump sum is a one-time fixed payment that you can offer to collections. This lump sum should be less than the amount you are currently being charged. Collections agencies have some incentive to accept lump sums as it is at least a guarantee that they will receive a payment rather than none at all.
Similarly, a structured settlement is a payment plan that rolls out over a year. The key here is to negotiate to pay an amount lower than what you are currently being charged. The first step you can take is to spend time creating a solid plan of payment that you can present to your collection agency.
Medical Hardship Help With Debt Relief
We will go into detail about your debt relief options. Just for context, there are pros and cons to each debt relief option, so be sure to consider everything before taking action. Check out the debt relief calculator below to understand the specific options including payment estimates and pros and cons. Read the information below the calculator for additional information.
Debt Settlement
First of all, before entering into a debt settlement agreement, make sure that you have a legitimate medical hardship. If you get into unnecessary debt (like getting state-of-the-art electronics or luxury cars) to get into a debt relief program, most debt relief companies will avoid you like the plague and it might be termed as a fraudulent action.
As a means of debt relief, debt settlement is highly beneficial for people who are struggling to meet their medical bill obligations. But there is a catch- you have to accept that the debt is valid. If you dispute the debt or think that the way the debt accumulated was unfair, then you don’t qualify for debt settlement.
Debt Management
A debt management plan is a debt relief option that helps people reduce their unsecured debt; in this case, medical debt, and regain financial control.
After you enroll in a debt management arrangement, you have to make predetermined monthly contributions to a credit counseling company.
These monthly contributions are determined by what you can comfortably afford. In most cases, the monthly amount results from an analysis comparing your household expenses against your earnings (income).
Bankruptcy
For many people overwhelmed by medical bills and debts, the most commonly asked question from them is whether they can file for
medical bankruptcy without all the other debts coming up.
While you can easily file for bankruptcy due to medical debt, the chances of the other debts that you have incurred arising are pretty huge.
When you file for bankruptcy, remember that all unsecured debts that you have will be considered. In case you have other unsecured debts like personal loans, credit cards, back taxes, among others, they will have to be listed in the bankruptcy.
If you find that you cannot meet or you are not comfortable with all the aspects that entail filing for medical bankruptcy, this is not necessarily the only debt relief option at your disposal. You can still consider any of the above-mentioned debt relief choices.
Answer a Lawsuit if you’ve Been Sued
Although you may be hoping if you ignore the lawsuit, it will go away, this is sadly not the case. If you are feeling overwhelmed by
how to answer the lawsuit, follow these steps:
- Respond to the claims listed against you in the case: When you are sued, you will receive documents from the court that will outline the allegations against you. In your reply you have options. You can admit, deny, or deny due to the lack of knowledge to each claim. Be careful when admitting to the claims, as they may take it as you giving proof that you owe it all.
- Review your affirmative defenses: Affirmative defenses are any legal reasons that you should not be responsible for the debt in question. One great example of an affirmative defense would be if the statute of limitations on the medical debt has expired.
- File the Answer before your state’s deadline: Once you have reviewed your answer, be sure to file it before the deadline in your state to avoid a default judgment.
Ascend Wants to Help
If you have questions about the statute of limitations, debt collection lawsuits or any other debt questions,
contact Ascend. We can help you locate a bankruptcy lawyer in your area who offers
free bankruptcy consultations or help you explore your other
debt relief options. Let’s work together to find the best solution to your debt problems.
