Medical Bills Statute of Limitations by State
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Summary:
The statute of limitations on medical bills is typically between three and six years. However, this timeframe varies by state and can be as long as 10 years in some states. Knowing your state law regarding the statute of limitations for medical debts is important if a debt collector is trying to sue you. If the statute of limitations has run out, you have a good chance of getting the lawsuit dismissed.
Medical bills can get astronomically high even for those with good insurance, and many Americans don’t have any health insurance. According to the Centers for Disease Control and Prevention (CDC), more than 30 million Americans are without health insurance as of early 2023.
This translates to medical debt being a huge problem for a lot of people. The Consumer Financial Protection Bureau (CFPB), in its most recent report, says Americans have over $88 billion in medical debts and estimates the amount of medical debt in collections is even higher because much of it goes unreported.
Read on if you’re in collections over unpaid medical debts, and know that you’re not alone. Today we’ll discuss why it’s important to know the statute of limitations on medical debt and what that means if a creditor or debt collection agency is trying to sue you over your unpaid medical bills.
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What does “statute of limitations” mean?
A statute of limitations defines the time limit for one party to take legal action against another. Each state sets its own time periods for statutes of limitations, and they vary depending on the type of case or claim. (Federal laws determine the statutes of limitations for federal cases.)
For instance, with medical debt, a state might set the statute of limitations at three years. That means if a creditor or debt collection agency wants to sue you for unpaid medical bills, they need to do so before that three-year period has expired. Also, be aware that the clock doesn’t start ticking on the statute of limitations until you’ve defaulted on the medical debt — not when you first received the bill.
“Once the statute of limitations has expired, the medical debt becomes ‘time-barred,’ meaning a debtor can’t be sued for it. But the debt still exists, it doesn’t go away, and it can continue to affect your credit report,” explains Jack Prenter, financial expert and CEO at DollarWise.
IMPORTANT! Keep in mind that the clock can often be reset at any time, even after the debt statute of limitations is up. (Although you should check your state laws on this to confirm.) This means that if debt collectors call you and you acknowledge the debt or make even a small payment, the clock could be reset for another three years, following the above example.
Types of debt
Not only do statutes of limitations vary by state law, but they also depend on the different types of debt you have. The following are the basic categories of debts.
Written contracts
Medical bills often fall under the category of a written contract. Written contracts are essentially any agreement where you’re signing something, even if it does not specify the amount you’re paying or the terms of repayment.
All that paperwork you sign at a hospital or doctor’s office? That’s a written contract for medical care.
Promissory notes
A promissory note basically just describes a loan. It’s a written agreement spelling out exactly how you’ll pay back what you owe, including the time frame in which you need to repay it, the monthly amount due, and the interest rate you’re paying.
Many people use personal loans to pay for medical expenses, so your medical debt may fall under this category.
Open-ended credit
Open-ended credit refers to paying with a credit card or other type of revolving credit like a home equity line of credit (HELOC). This type of debt is open-ended because there isn’t an exact due date for full payment and monthly payments can fluctuate. It’s not uncommon for people to use open-ended credit to cover medical bills.
Oral contracts
An oral contract is when two parties make a verbal agreement about repaying a sum of money. Medical bills are rarely agreed to by oral contracts, but it’s possible.
For example, let’s say you had a neighbor who was a doctor and he agreed to perform some medical care on you. In exchange for the treatment, you said you’d give them $1,000 next month. In this case, you would be in an oral contract.
Pro Tip
If you’re struggling with medical debt or other debts, you might want to make an appointment with a credit counseling agency. An experienced credit counselor can help you assess your financial situation and come up with a debt management plan you can stick to.
Statute of limitations by state
Since each state has a different statute of limitation term, it can be difficult to keep track of when your medical debt may expire. Depending on the type of debt you have, use the table below to see when your medical debt expires.
What to do if you get contacted by debt collectors?
If you’re delinquent on your medical debt, there’s a very good chance you’ll be contacted by a debt collector. And, though it may seem like the best choice at the time, the worst thing you can do is ignore them. In most cases, if you do, they’ll very likely take you to court to get the money.
Furthermore, if they decide to take you to court and you don’t respond to the complaint or appear, they’ll most likely be awarded a default judgment against you. This means they win by default because you failed to show up and defend yourself. This is true even if the statute of limitations is up.
“Very often you’ll be sued even if the statute of limitations has passed, because they are hoping that you don’t know your rights and will still make the payment. Typically this is illegal and you should contact a lawyer if this happens,” says Prenter.
If the creditors win a judgment against you, they may then be able to garnish your wages or bank account or put a lien against your property. Therefore, it’s in your best interest to try and fight the lawsuit, particularly if the statute of limitations has expired.
IMPORTANT! Even if you eventually pay your delinquent medical bills, your medical debt could still be on your credit reports for up to seven years. However, you may be able to get the creditor to remove the notation from your credit reports, especially if you’ve paid the debt in full. You might also want to consider hiring a credit repair company for some assistance.
Get a debt validation letter
By law, creditors or collectors are supposed to notify you in writing about the medical debt owed, who you owe it to, the amount you owe, how to dispute it, and in what period of time you have to respond (typically within 30 days). This is called a debt validation letter, and you must respond and dispute it. (If you don’t get the letter, be sure to request it.)
Even if you suspect the debt is valid, you still want to dispute it because the collector may have incorrect information. After all, it’s up to them to prove you owe the money, and you have a right to review the evidence against you.
In many cases, debt collectors get it wrong and you could clear this up without ever having to go to court. There are several good reasons to dispute the debt.
- You don’t recognize it. It’s possible you may have forgotten about very old medical bills, but it’s also feasible that the medical debt isn’t even yours. It could be that the person who owes the money just has the same name as you. It may also be a debt collection scam.
- The amount is wrong. Maybe you know you had an unpaid hospital bill from a few years ago, but you thought you only owed $200 and the collector says the bill is $2,000. In that case, you want to see the bill to verify whether the charges are even correct.
- The debt is old. This is where the statute of limitations comes in. If the statute is up, in most cases, you can’t be taken to court. But if you are, the expired statute of limitations is a valid defense you can employ to get the case thrown out.
Know your rights
Debt collectors can and will try to collect on your medical debt even after the statute of limitations is up. But there are legal limits spelled out by the Fair Debt Collection Practices Act (FDCPA) to protect consumers from excessive harassment by debt collectors. Still, that doesn’t mean some collectors won’t attempt to use unfair tactics anyway.
Here are a few violations debt collectors are not allowed to do by law:
- Contact you by phone before 8 a.m. or after 9 p.m.
- Contact your family members, co-workers, or friends regarding your debt
- Fail to respond to your debt validation request
- Lie, threaten you, or use foul or derogatory language to intimidate and try to collect a debt
- Attempt to collect a debt that may not even be yours
- File a lawsuit against you for a debt that has passed the statute of limitations
If you feel you are a victim of harassment by a collection agent, you can file a complaint with the CFPB online or by calling (855) 411-CFPB (2372). You can also contact your state attorney general’s office.
Pro Tip
The courts don’t keep track of the statute of limitations on medical debt. This means it’s your responsibility as the defendant to be aware of your state law regarding the statute of limitations and raise it as a defense in a lawsuit, if applicable.
What to do if you’re sued over delinquent medical bills
If creditors or debt collectors take legal action against you, you need to counter their claims even if the statute of limitations is up. If you don’t, the plaintiff wins by default. Here’s what you need to do.
- Respond to the complaint. When you get a summons to appear in court, you’ll also receive a complaint from the plaintiff (the collector) that lists the charges and reasons for the money owed. You need to respond to all the claims in the “answer” document.
- Explain your defense. You basically want to deny all claims as well as assert an affirmative defense that the statute has run out. That should be enough for your case to be dismissed.
- Return your answer by the deadline. You have to file your response within the timeframe provided. Again, if you don’t, the plaintiff will win by default. You may also want to send a copy of your defense to the attorney for the plaintiff.
Once the statute of limitations has expired, the medical debt becomes 'time-barred,' meaning a debtor can't be sued for it. But the debt still exists, it doesn't go away. — Jack Prenter, financial expert and CEO at DollarWiseClick to Tweet
How to avoid legal action over medical bills
If you know you have medical debt, the statute of limitations hasn’t expired, and you think you might lose in court, you have a couple of other options to handle the matter.
- Negotiate for a lower amount. One possibility to avoid the courthouse is to negotiate with the debt collectors to pay less than you owe. You may save yourself some cash by negotiating for a smaller amount and getting collectors off your back. However, depending on the amount, it may still appear on your credit report.
- Hire some help. Negotiating can be tricky if you don’t know what you’re doing. You may want to consider hiring an attorney or a debt settlement company to negotiate on your behalf.
Key Takeaways
- The statute of limitations for medical debts varies by state but is usually between three and 10 years.
- A debt collector isn’t supposed to file a lawsuit against you for unpaid medical bills after the statute is up. Despite that, they often do and bet that consumers don’t know the law.
- Debt collectors will often still try to collect on a debt even after the statute of limitations has expired because the debt doesn’t disappear when the statute is up.
- Depending on your state laws, making a partial payment or even acknowledging past due medical bills may restart the clock on the statute of limitations.
- If you’re delinquent on your medical debt, it will be listed on your credit report and can remain there for up to seven years.
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