All About Medical Debt Collection Laws

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Everything You Need to Know About Medical Debt Collection Laws

Medical bills can add up quickly after an accident or illness—sometimes before you even have the chance to recover. Miss a few payments, and a collections agency may contact you. If you're wondering if are different from other types of debt, read on.

Know your rights and understand what a debt collector can and can't do since that is the first step to getting out of this stressful situation. Questions you probably have included, "Can debt collectors charge interest on medical bills?" And "Can debt collectors sue for medical bills?" We'll answer these while also explaining how to deal with debt collectors. Read on.

Need a faster, automated solution? Use DoNotPay—your 'robot lawyer' who is extremely savvy in medical debt collection laws.

How Is Medical Debt Different From Other Debt?

There are some similarities, but medical debt differs from other types of debt in many ways. One difference is that a simple coding error can lead to a significant overcharge—and as many as 80 percent of hospital bills contain errors, Healthline reported.

It is so important to confirm the debt is accurate before paying, but you should do this before your bill is sold to a collection agency. Read about getting a validation letter in the steps listed below—or let DoNotPay do this for you.

Medical Debt Has a 180-Day Grace PeriodMost will sell your debt to a collection agency if your debt is 60 to 120 days past due. But since health care providers don't regularly report to credit bureaus, you have some time to resolve the debt before your credit score is negatively affected.

Medical debt collection laws state that credit bureaus are required to wait 180 days before the collection account appears on your credit report. This grace period is only for medical debt, not other types of debt, due to a new set of rules that went into effect in 2017, Money reports.

Medical Debt May Not Impact Your Credit Score as Much as Other DebtIf a medical debt is paid by your insurer, Experian, Equifax, and TransUnion will remove it from your credit history instead of having it continue to impact your credit score for seven years, CNBC reports.

If you dispute an incorrect bill and your health insurance company ends up finally paying for it, you can make sure it is removed from your credit report. However, resolving this issue will take lots of patience and numerous phone calls, so let DoNotPay help.

Can Debt Collectors Charge Interest on Medical Bills?No, medical debts rarely charge any interest, according to And under the Fair Debt Collection Practices Act (FDCPA), a debt collector can not collect interest or fees above the amount you owe.
Can Debt Collectors Sue For Medical Bills?Yes. If an unpaid medical bill is sent to a collections agency and you start getting letters in the mail that you ignore for too long, you can be sued—just like any other type of debt.

And if you're wondering how often debt collectors take people to court, we can tell you this fact—debt collection lawsuits are on the rise nationwide.

This is not specific to medical debt, but the number of debt collection suits more than doubled nationwide from 1993 to 2013, according to The Pew Charitable Trusts. Debt claims represented 1 in 9 civil cases in all state courts in 1993—and that number increased to 1 in 4 by 2013.

State data through 2018 shows the numbers are still trending upward—the growth of debt collections cases has continued to outpace nearly all other types of cases.

Understanding Medical Debt Collection Laws & Resolve Debt, Step-By-Step

Here's a rundown of everything you need to know and do, step-by-step. It's essential to understand the rules regarding so you'll know your rights before speaking to a debt collector.

Keep these tips in mind, and you'll be able to make negotiations less stressful. Or, choose the more straightforward solution—skip ahead to the next section and let DoNotPay handle all of this for you.

A Guide to Handling It on Your Own

  1. Remember there is a 180-day grace period for medical debt, as noted above—so if you contact the collections agency before this time is up, it won't appear on your credit history.
  2. Validate the debt by asking for a Letter of Validation. Under the Fair Debt Collections Practices Act (FDCPA), you are entitled to ask for this letter.
  3. Confirm that the debt amount is correct and the collector is a legitimate company.
  4. Negotiate—first with your insurance provider and then with the debt collector. And you have many more options in terms of settlement agreements and repayment options when it is a medical bill.
  5. Get your agreement in writing. Make sure it clearly states the terms of your settlement or payment plan–and that your debt will be considered resolved and won't be subject to any further collection.
  6. Take the necessary steps to check to make sure your credit report is clean.

DoNotPay Will Stop Collectors & Resolve Medical Debt Issues, Quickly

If all this seems too overwhelming, let DoNotPay help. Just answer a few questions explaining your situation, and we will let you know what options you have, including paying off your debt or reaching a settlement.

After choosing an option, we will file all the necessary paperwork. We will even negotiate on your behalf, and you won't ever need to call to speak to anyone.

Here's how it works:

  1. Search "debt collection" on DoNotPay.

  2. Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.

  3. Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to the CFPB.

That's it! Rest assured—DoNotPay will use first-class mail to ensure the debt collector receives your request. If we determine they are using unfair debt collection practices and you choose to file a claim with the CFPB, we will handle this as well.

Now that you are on your way to solving your medical debt collection issues, it's time to look into ways to improve your credit score and increase your credit limit.

Why You Should Let DoNotPay Advocate With Medical Debt Collectors for You

  • Fast—Tell us some information, and then let us handle the rest!
  • Stress-Free—No need to worry about whether you understand medical debt collection laws. We're here to help!
  • Successful—Relax knowing your debt collection issues will soon be resolved.

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