Medical debt in collections: what to do

In January 2025 the CFPB finalized a rule to take medical bills off most credit reports. It never took effect. On July 11, 2025, a federal court in Texas vacated the rule (CFPB, opens in a new tab) at the joint request of the CFPB and the plaintiffs in the case, finding it went beyond the CFPB's authority.

So no federal rule keeps medical debt off credit reports. The CFPB now says (CFPB, opens in a new tab) that unpaid medical debt more than 365 days past the date of service and over $500 could appear on your credit reports.

Start with the itemized bill, not the summary. It lists each service, date and charge. Put it next to the explanation of benefits from your insurer, which shows what was billed, what the plan paid and what it says you owe.

If the numbers do not match, call the provider's billing office before you deal with the collector. A bill that was never sent to your insurer, or that charges more than your plan allows, may shrink once it is corrected.

Once a collector is involved, federal law gives you the right to a validation notice with the creditor, the amount and your right to dispute. If you dispute in writing within 30 days (Cornell LII, opens in a new tab) of that notice, the collector must pause collection until it sends you verification.

The No Surprises Act took effect on January 1, 2022. If you have health insurance, CMS says (CMS, opens in a new tab) it protects you from unexpected out-of-network bills for emergency room visits, for non-emergency care at an in-network hospital or surgery center, and for air ambulance services.

If you do not have or use insurance, providers usually must give you a good faith estimate when you schedule care in advance or ask for one.

Often, yes, at a nonprofit hospital. Federal tax law requires tax-exempt hospitals to have a written financial assistance policy (IRS, opens in a new tab) offering free or discounted care to patients who qualify, and to publicize it widely.

Under the IRS billing rules (IRS, opens in a new tab), the hospital must make reasonable efforts to see whether you qualify before it takes steps such as a lawsuit or a credit report. You have an application period of at least 240 days from the first bill after your care.

The hospital stays responsible for collection steps taken by a debt buyer or collector acting for it. So if your bill was sold or sent to a collector before anyone asked about your income, tell the hospital and ask for an application.

For-profit hospitals and doctors' offices are not covered by these federal rules, but they may have their own assistance programs. It costs nothing to ask.

States add their own rules on medical bills. Four rules from three large states follow, each with the law that says it. Check your own state with legal aid; the rules change often.

A collector may agree to accept less than the full balance of a medical debt. Checking the bill and applying for assistance can lower what you owe at no cost, so those steps come first. Settlement is for a bill that is correct and that no assistance program will reduce.

If you have $10,000 or more of unsecured debt in total, medical bills included, we can talk through whether settlement fits. We will tell you plainly if a bill should be disputed or sent to the hospital's assistance program first1.

Respond by the date in the court papers, yourself or through a lawyer. The CFPB says (CFPB, opens in a new tab) responding does not mean you agree you owe the debt, and that if you do not respond the court can enter a default judgment that may lead to garnished wages or a frozen bank account.

Time limits apply to medical debt too. In Florida, a suit on a hospital bill must be filed within 3 years of its referral to a collector. Talking about a settlement does not pause your court deadline.