What to do about medical bills in collections

What it means when a medical bill goes to collections

When a bill stays unpaid for a long time, the doctor's office or hospital may stop trying to collect it. It then gives or sells the bill to a debt collector. A debt collector is a company that collects old bills, and it often keeps part of what it gets.

The collector is now the one who writes and calls you. The bill may still be right, it may have mistakes, or it may even belong to someone else. That is why the first job is to find out whether the debt is real and correct.

A bill in collections can feel scary, but you are not out of options. Asking for the right paperwork is the first step, and sometimes it shows that the bill is wrong. Our guide on what happens if you don't pay medical bills shows the steps that come before this one.

What a debt collector is not allowed to do

A federal law called the Fair Debt Collection Practices Act sets rules for collectors. The Federal Trade Commission, the agency that handles many consumer protection issues, says collectors cannot do any of the following.

• Threats of harm, rude language and curse words are not allowed.
• Lying is not allowed, for example by pretending to be a lawyer or a government worker.
• Interest or fees that the law or your agreement does not allow cannot be added.
• Telling other people that you owe a debt is not allowed.
• Calls before 8 a.m. or after 9 p.m. are not allowed unless you agree.
• Calls to your workplace must stop once you say your employer does not allow them.

The Consumer Financial Protection Bureau, or CFPB, adds that a collector cannot threaten a lawsuit it does not plan to file. A collector also cannot sue or threaten to sue after the time limit has passed.

A collector who breaks these rules can be reported to the CFPB or to your state attorney general's office. Your notes and copies of letters will back up what happened.

How to ask for proof of the debt

The law calls this step debt validation. The collector must send you a notice at the first contact, or within five days after it. The notice names the collector, the company you first owed and the amount. It also explains how to dispute the debt.

If you think the debt is wrong or you are not sure, send a letter within 30 days of getting that notice. Say that you dispute the debt and ask for proof. The FTC suggests certified mail with a return receipt, which gives you a record that the letter arrived. Keep a copy of every letter that you send.

After your letter arrives, the collector must stop collecting until it sends you proof. The CFPB also has free sample letters that you can copy. It is still worth asking after the 30 days have passed, because you may learn something useful.

• Ask for the name of the hospital or office and the dates of service.
• Ask for an itemized bill that shows each charge.
• Ask how the collector figured the amount, including any fees or interest.
• Compare all of it with your own papers and any insurance statements.

When to pay a medical bill that is in collections

Pay only after you are sure the amount is right. A payment made by mistake, or a payment on a bill that is not yours, is hard to undo. Never give your bank or card details to a caller until you have confirmed that the collector is real.

Many people can also ask the hospital for help even after the bill has gone to collections. A nonprofit hospital may still take a financial assistance application, and our guide on hospital financial assistance explains how. The IRS says a hospital must pause big collection steps while it decides on a complete application.

If you do owe the money, ask the collector about a lower amount or a payment plan. Put any deal in writing before you pay, and ask for a letter that says the account is paid. Our negotiation guide has scripts for these calls.

The time limit on lawsuits over old debt

Every state sets a time limit for suing over a debt, and the law calls it the statute of limitations. The limit varies by state and can also differ by the kind of debt, so we cannot give you one number. Our guide on the statute of limitations on medical bills explains how it works.

After the time limit passes, a collector cannot sue you over the debt. The FTC warns that in some states a payment or a written promise to pay can restart the clock. Check with your state attorney general or a legal aid office before you pay or sign anything on an old debt.

Court papers should never be ignored, and the CFPB says that answering them does not mean you agree you owe the money. A court can enter a default judgment against someone who does not answer, and that is very hard to undo.

How collections affect your credit

A medical collection can hurt your credit, but the three big credit bureaus now wait a year before they list an unpaid one. They also leave off paid medical collections and those under $500. Our guide on medical bills and your credit report has the details.

If you think you are having an emergency, call 911 or go to the nearest emergency room right away. Do not let a bill stop you from getting care. This page is general education and is not legal advice. For help finding a doctor you can afford for regular care, use our directory.