Short Sale Vs. Foreclosure
The statute of limitations on medical debt varies from state to state. But even if your statute of limitations has expired, the medical debt still exists.
An expired statute of limitations just means the debt collector couldn’t win a lawsuit against you in the civil court system. You still owe the money, and debt collection can continue.
The statute of limitations also has nothing to do with your credit report. Even expired medical debt can stay in your credit history for seven years, impacting your credit score.
Why Statutes of Limitations Matter in Debt Collection
Your statute of limitations has no impact on your credit score or whether you owe the money.
So why do statutes of limitations matter?
Because they set time limits on legal action a medical debt collector can take.
Within the timeframe of the statute, for example, a debt collector could win a lawsuit against you and possibly start wage garnishment to collect your old debt.
Outside this time limit, a debt collector could still sue you, but you could get the case dismissed. You might not even need to hire a lawyer.
A collection agency won’t tell you this. It could file a legal action with the intention of scaring you into making a payment
If you didn’t know the statute had expired, you may be prompted to pay.
Knowing your state law can give you more control over the credit reporting and debt collection process.
How to Avoid Resetting Your Statute of Limitations (SOL)
You can re-set the statute of limitations on your medical debt to Day 1 if you decide to make a payment or even contact the debt collector.
Re-setting the statute of limitations increases the amount of time you could be held legally liable for the old debt.
Unless you’re prepared to pay off the medical debt completely or negotiate a payment plan that cancels the debt, don’t interact with the creditor or collection agency.
Simply acknowledging, verbally, that you owe the debt can re-set the time period and give your debt collectors more time to take legal action against you.
Statutes of Limitations for Each State
Medical debt obligations are considered “written contracts.” Here are the written debt statutes of limitations for each state.
Keep in mind state laws can change so check with an attorney or another legal resource in your area to confirm your time frame.
- Alabama: 6 years
- Alaska: 6 years
- Arizona: 5 years
- Arkansas: 6 years
- California: 4 years
- Colorado: 6 years
- Connecticut: 6 years
- Delaware: 3 years
- Florida: 5 years
- Georgia: 6 years
- Hawaii: 6 years
- Idaho: 5 years
- Illinois: 10 years
- Indiana: 10 years
- Iowa: 10 years
- Kansas: 5 years
- Kentucky: 10 years
- Louisiana: 10 years
- Maine: 6 years
- Maryland: 3 years
- Massachusetts: 6 years
- Michigan: 6 years
- Minnesota: 6 years
- Mississippi: 3 years
- Missouri: 10 years
- Montana: 8 years
- Nebraska: 5 years
- Nevada: 6 years
- New Hampshire: 3 years
- New Jersey: 6 years
- New Mexico: 6 years
- New York: 6 years
- North Carolina: 3 years
- North Dakota: 6 years
- Ohio: 15 years
- Oklahoma: 5 years
- Oregon: 6 years
- Pennsylvania: 4 years
- Rhode Island: 10 years
- South Carolina: 3 years
- South Dakota: 6 years
- Tennessee: 6 years
- Texas: 4 years
- Utah: 6 years
- Vermont: 6 years
- Virginia: 5 years
- Washington: 6 years
- West Virginia: 10 years
- Wisconsin: 6 years
- Wyoming: 10 years
Statues will almost always be different for another type of debt such as an oral agreement or open-ended loan such as credit card debt.
The time limits above apply only to health care debt and other written contracts.
When Does the Clock Start on a Statute of Limitations?
Unless your state law says otherwise, your statute of limitations clock starts ticking on the due date of your first missed payment.
At that point, your account becomes past-due and your creditor’s collection actions can include a lawsuit.
If you’re sued for non-payment of medical debt, it will be up to you or your attorney to find out whether the statute of limitations has expired on your debt.
Remember you can reset your clock by making a payment or even discussing the debt with your health care provider or a collection agency if your hospital or medical clinic has sold the debt.
What Other Consumer Protections Do I Have?
Along with the statute of limitations on written contracts, including health care debt, federal laws protect consumers from unlawful debt collection actions.
The Fair Debt Collection Practices Act, for example, prohibits debt collectors from contacting you more than once a day or during unusual hours.
Also, debt collectors can’t call you at work, call your friends or family members about your debt, or threaten you with criminal prosecution.
Some collection agencies will ignore your rights unless you assert them.
Contact your state attorney general’s office or the Federal Trade Commission if the collection of a medical debt violates your rights.
Medical Collections and Your Credit Score
Regardless of your state’s statute of limitations, medical debt can stay on your credit report for seven years.
But over the past few years, medical debt has lost some of its ability to hurt your credit score.
Sample Medical Collection Letter
Prior to 2014, medical debt had the same impact as student loan debt, credit card debt, or other personal debt in your FICO score.
Now, FICO and other credit scoring models have diminished the impact of medical debt. They know that consumers have less control over whether they need medical care.
For example, if you contracted Covid-19 and spent a few days in a hospital, you could owe hundreds of thousands of dollars you never planned to spend.
Credit bureaus also know repayment of medical debt depends partly on insurance companies whose actions consumers can’t always control.
Therefore, this debt doesn’t always reflect your personal finance choices.
Even with these, and more upcoming, changes to credit scoring, medical debt can still impact your credit bureau data which impacts your ability to borrow.
How to Remove Medical Debt from Your Credit Report
It is possible to remove medical debt, late payments, and collection accounts from your credit history.
One way is to negotiate a settlement.
You can agree to pay a specific amount of the debt in exchange for the creditor stopping its collection of medical debt and removing the negative items from your credit report.
If you use this strategy, get your agreement in writing before paying a lump sum amount or starting a payment plan. Without a written contract, the creditor may not stick to the deal.
Keep in mind your payment could restart the statute of limitations on your debt. So getting the debt considered paid in full will be essential.
Otherwise, you could be opening yourself up to more legal action.
Another strategy: Look for inaccuracies in the debt as recorded on your credit report.
If you see inaccuracies, you can request the debt collector correct the information. If the details can’t be corrected, the creditor would have to remove the item from your credit report.
You can get a free copy of your credit report from all three credit bureaus at annualcreditreport.com.
Learn More: How To Remove Medical Collections From Your Credit Report
Get a Free Copy of Your Credit Report
Or, Hire a Professional to Remove the Medical Debt
The lawyers and paralegals at Lexington Law Firm, a professional credit repair company, use a variety of strategies to get negative information removed from your credit history.
If you’d like to get the medical debt removed without tampering with your statute of limitations and without spending a couple hours a day making phone calls and mailing letters, I recommend checking out Lexington Law.
You’ll have to pay a monthly subscription rate while you use this service, but this money would be well spent if it helps you get lower interest rates on borrowing over the next few years.
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A Question From a Reader About Statutes of Limitations
I got this question from a reader about partial payments to collection agencies that touch on statutes of limitations for medical debt.
The question touches on something important: your leverage when you deal with collection agencies.
A majority of my credit reporting issues are, unfortunately, a lot of medical bills I’ve been unable to pay over time. Not sure how these are seen in terms of the statute of limitations, but I recently received a letter from the collection agency that owns all of my accounts, and that partial payments were no longer accepted. Strangely enough, I had previously paid off two of the accounts, online, with receipts for each.
The statute of limitations is six years in most states. Also, a collector who says that “partial payments” are no longer accepted is lying.
Collectors will tell you anything to get you to pay. They are simply trying to scare you and I bet they would be more interested in cutting a deal with you if you were to say, “Well then I suppose you get nothing.” Keep on pushing them and they will eventually take an offer.
If you need help removing a medical collection from your credit report check out my article on how to do that.
In regard to the paid off accounts and the incorrect account balances. You need to print out the receipts you have and any other documentation that proves these accounts are paid off. Mail these documents to the collection agency and tell them that by federal law you have the right to request that they provide solid proof that the debts are yours.
In many cases, they simply cannot do this – either because they were lying or because they don’t know how to do their books. Hang in there.
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