Can Medical Bills Go to Collections? Timeline and Steps

Medical bills can go to collections if they remain unpaid long enough, but the process usually takes months rather than weeks. In many cases, you'll receive multiple notices from your provider before the debt is sent to a collection agency.

Medical debt also receives different treatment than other types of debt. For example, unpaid medical debt under $500 isn't reported to the major credit bureaus, and larger balances generally can't appear on your credit report until they've been in collections for at least 12 months.

Find out how medical debt collections work, how they can affect your credit and what steps to take if your bill has already been sent to collections.

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Key Takeaways

• Yes, medical bills can go to collections, but it usually takes months. Most providers wait 120 to 180 days and send several notices before handing the account to a collection agency.

• Acting within the first 90 days gives you the most leverage. Ask about a payment plan, a hardship program or a collection hold before the account leaves the provider.

• Small medical balances currently stay off your credit reports. The three bureaus exclude unpaid medical collections under $500, and larger balances need 12 months in collections first.

• Bigger unpaid balances can linger on your report for years. Medical debt over $500 may appear for up to 7 years from the original delinquency date once reported.

• You still have rights once a bill is in collections. Request debt validation within 30 days, check your bill for errors and ask about a lump-sum settlement.

Summary generated by AI, verified by MoneyLion editors

How Do Medical Bill Collections Work?

If your medical bills go unpaid, the hospital or provider will send your account to a third-party collection agency that will try to collect on the debt.

Here’s how the process works:

1. You’re billed for a medical service. The window to pay is typically 30 days from the time you receive the bill. 

2. You don’t pay the bill or fall short of paying the minimum that the creditor wanted. 

3. You receive several notices via text and email to pay the bill. 

4. If you fail to pay the bill or don’t contact the creditor, they’ll sell the debt to a collection agency.

5. Once the collection agency receives the account, it'll attempt to contact you to pay the bill. They may contact you by phone or email.

6. If a balance over $500 stays unpaid for at least 12 months after it enters collections, it can be reported to the credit bureaus.

7. The creditor could sue to get a wage garnishment to collect the outstanding amount. 

Medical Debt Collections Timeline

Does Medical Debt in Collections Hurt Your Credit? 

Unpaid medical debt that’s less than $500 cannot be reported to the three credit bureaus. Unpaid medical debt that’s over $500 must be in collections for over a year before it can be reported to the bureaus.

What Changed With Medical Debt Reporting

Most of today's medical debt protections come from credit bureau policy changes. Keep in mind, they are not federal law, so they're worth verifying when you check your reports:

• Small balances are left off your reports: Unpaid medical debt under $500 currently isn't reported to the credit bureaus.

• Paid medical debt drops off: Paid medical collections no longer appear on credit reports.

• Larger balances get a grace period: Medical debt over $500 currently must be in collections for at least 12 months before it can be reported.

VantageScore vs. FICO: Differences in Medical Debt Weighing

• FICO 9 and FICO 10: Generally place less weight on medical debt collections. Older FICO models may treat medical collections similarly to other collection accounts.

• VantageScore 4.0: Does not factor medical debt collections into credit score calculations.

How To Stop a Medical Bill From Going to Collections

If your medical bill is less than 90 days overdue, acting quickly may help you avoid collections altogether. Here are some steps you can take before the account is sent to a collection agency.

• Check with your insurance: Was insurance responsible for part of the service? Verify this information since insurance may be required to pay for all or a portion of your medical bill. 

• Ask for a line-item bill: Medical errors can happen, and you don’t want to be charged for any service you didn’t receive. 

• Ask if you can set up a payment plan: Since the bill hasn’t gone to collections, you may have some bargaining power to get a payment plan in place.

• Pay a lump sum: Ask the hospital or provider if they will accept a lump sum payment. Many creditors may not want to go through the hassle of collections. 

• Ask for a collection hold: If you’re negotiating in good faith, ask the creditor to hold off on forwarding it to collections. 

• Keep written documentation: Make sure you keep a running record of dates, who you talked to and what was discussed.

What To Do If Your Medical Debt Is Already in Collections

So your medical debt is already in collections — don’t panic. Use this plan of action to lessen the impact on your financial picture.

• Request debt validation: Within 30 days of the contact from the collection agency, request written proof that the debt is valid and that they have the right to collect it. 

• Get an itemized bill from your original provider: Medical errors are common, and you need a bill specifying each charge to make sure you received that service. 

• Contact your insurance company: Sometimes insurance will cover a portion of the bill, especially if it was erroneously sent to you before it was sent to your insurance provider. 

• Reach out to charity organizations: Contact your hospital to see if you can receive some assistance with the bill if you’re experiencing hardship. 

• Try to offer a lump-sum settlement: Collection agencies would rather receive something rather than nothing, so see if they’ll accept a settlement for the debt. 

• Check your credit report: You want to make sure there are no errors on your credit report. 

• Know the statute of limitations: Every state has a statute of limitations on the time limits that a collector can sue for the debt. 

Your Next Steps 

• If your medical bill is 120 to 180 days past due, there’s a high possibility it will go to collections. 

• Unpaid medical debt less than $500 won’t be reported to the bureaus. Unpaid medical debt that’s over $500 is required to be in collections for at least 12 months before it can be reported. 

• Communicate with your provider or hospital before your account is forwarded to collections. There are options, and silence or ignoring your bill will make it worse. 

• Make sure to verify the debt, check with insurance and propose a payment plan as strategies to avoid collections. 

FAQs 

Can medical bills go to collections even if I'm making payments? 

If the provider deems that the payment isn’t enough to cover the debt, it can still be forwarded to collections.

How long does it take for a medical bill to go to collections?

Most hospitals and providers will wait 120 to 180 days before sending a bill to collections.  

Will a medical bill in collections always show up on my credit report? 

No, not always. An unpaid medical bill that’s less than $500 is ineligible to be reported to the credit bureaus. An unpaid medical bill that’s over $500 must be in collections for at least 12 months before it can be reported to the credit bureaus. 

Can I negotiate a medical bill after it's already in collections? 

Yes, you can still negotiate a bill after it’s in collections. Collection agencies may accept a lump-sum settlement offer. 

Does paying off a medical collection remove it from my credit report? 

In most cases, paying off medical collection debt will remove it from your credit report. 

What's the difference between medical debt under $500 and over $500? 

An unpaid medical bill that’s less than $500 is ineligible to be reported to the credit bureaus. An unpaid medical bill that’s over $500 must be in collections for at least 12 months before it can be reported to the credit bureaus.

Key Terms

• Collection agency: A third party that a provider hires or sells the debt to in order to recover an unpaid balance. The original debt amount and your rights don't change when it moves.

• Debt validation: Your right to request written proof that a debt is valid and that the collector can legally collect it, generally within 30 days of first contact.

• Original delinquency date: The date you first fell behind on the bill. It sets the clock for how long a collection account can stay on your credit report, generally up to seven years.

• Statute of limitations: The state-set time limit during which a collector can sue you over an unpaid debt. It varies by state and debt type.

• Lump-sum settlement: A one-time payment a collector or provider accepts to resolve a balance, often for less than the full amount. Get the terms in writing before paying.

• Wage garnishment: A court-ordered deduction from your paycheck to repay a debt, which a creditor can pursue only after suing and winning a judgment.

• VantageScore: A credit scoring model that, in versions 3.0 and 4.0, excludes medical collections from the score entirely, unlike older FICO models that still factor them in.

Summary generated by AI, verified by MoneyLion editors

Sources

• Consumer Financial Protection Bureau. 2023. "What should I do when a debt collector contacts me?"

• Federal Trade Commission. "Debt Collection FAQs."

Photo credit: AzmanL / iStock