Can Medical Bills Go to Collections? Timeline and Steps

Medical bills can go to collections if they remain unpaid long enough. The typical timeline for collections is 90 to 180 days after your bill is due.

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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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 miss an agreed payment.

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, it may refer or transfer the account 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

What Happens Once a Medical Bill Is in Collections?

Once a medical bill goes to collections, a collection agency can contact you and attempt to collect the unpaid balance. What happens next depends on the amount owed, how long it remains unpaid and whether the collector takes further action.

• Collection and credit reporting: The collector may contact you by phone, mail or other permitted methods. Qualifying unpaid medical debt may eventually be reported to the credit bureaus based on the timelines outlined above.

• Legal action: A collector may sue to recover an unpaid balance. If it wins a judgment, wage garnishment may be possible depending on state law and other circumstances.

Good To Know

A collector generally must provide a validation notice within five days of first contacting you.

Does Medical Debt 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.

Here’s how FICO 9, FICO 10 and VantageScore handle medical debt collections:

• 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.

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.

How To Check Your Medical Bill for Errors

Medical billing mistakes can lead to unexpected charges or higher balances than you actually owe. Before making a payment, review your bill carefully and compare it with your insurance information.

• Request an itemized bill: Ask for a breakdown of services, charges and billing codes rather than relying on a summary statement.

• Verify your personal information: Check that your name, date of birth and other identifying details are correct.

• Compare your explanation of benefits (EOB): Review your insurance statement to make sure the charges and coverage amounts match your medical bill.

• Look for duplicate or incorrect charges: Check that you weren't billed twice for the same service or charged for care that you didn't receive.

• Review out-of-network charges: Confirm whether any services were billed as out-of-network and whether the charges are accurate.

How To Challenge Errors

If you find a mistake on your medical bill, contact your provider or insurance company to request a correction. Here's how to dispute incorrect charges and keep the issue from moving further into collections.

1. Call your provider: Let the provider know about the errors and make a note of who you talked to, the date and the response. Request a corrected bill and follow up if you don’t receive it.  

2. Escalate the demand in writing: If the phone call doesn’t remedy the error, write a letter disputing the specific charges. Ask the provider to put the account on pause while negotiating.  

3. Reach out to insurance: If the insurance company processed your claim incorrectly, file an appeal.  

4. Check your rights as an uninsured or self-paying patient: If your final bill is at least $400 higher than your good faith estimate, you may qualify for the federal patient-provider dispute resolution process.

Can't Afford Your Medical Bill? Here's Where To Find Help

If you need financial assistance with your medical bill, there are programs that can help. Here is a list of resources that may help:  

• Hospital charity assistance: Most nonprofit hospitals are required to provide financial help.  

• Medicaid: If you fall in the low-income category, Medicaid can help.  

• State and local programs: You can look on your state government website to find out resources for medical assistance.  

• Provider hardship programs: Always ask your provider for interest-free payment plans.  

How To Apply for Medical Bill Assistance

If you're struggling to pay a medical bill, contact your provider's billing department to ask about financial assistance or hardship programs. Here's how to get started:

1. Ask about available assistance: Request the provider's financial assistance policy and application. Find out whether you qualify for a discount, payment plan or other hardship assistance.

2. Gather your documents: Prepare pay stubs, proof of income and tax returns. You may also need an itemized bill showing your services and charges.

3. Submit your application early: Apply as soon as possible, ideally before your bill is sent to collections.

4. Request a collections hold: Ask the provider to pause collection activity while your application or billing dispute is being reviewed.

5. Get the agreement in writing: Confirm any approved discounts, payment arrangements or changes to your balance before making payments.

How To Stop a Medical Bill From Going to Collections

If your medical bill is less than 120 days past due, 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.

Dispute and Validate the Debt 

• 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.  

Ask for Help 

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

Attempt Settlement and Check Your Credit Report  

• 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. It can also help to look at the habits behind the balance, especially if you’re trying to cut back on spending going forward.  

Your Next Steps 

• If your medical bill is 90 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. 

• If you’re juggling more than one kind of balance, you may also want to get clear on credit card debt.

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 version 4.0, excludes medical collections from the score entirely, unlike older FICO models that still factor them in.

Sources

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

• Federal Trade Commission: Debt Collection FAQs

• Consumer Financial Protection Bureau: What information does a debt collector have to give me about a debt they’re trying to collect from me?

Photo credit: AzmanL / iStock

Parts of this article were created with AI assistance. MoneyLion editors reviewed, fact-checked and edited the final version and are responsible for its accuracy.