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What Happens If a Medical Bill Goes to Collections?

What Happens If a Medical Bill Goes to Collections?

What happens if a medical bill goes to collections? With the state of healthcare in the US, it’s no surprise that many people are asking this question on a daily basis. Surprise medical bills can turn your finances upside down. If you can’t make the payments on time, you could have your unpaid medical bill sent to collections.

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But what exactly does this mean? What happens if a medical bill goes to collections? Is there a way to get medical debt forgiveness? Finally, what can you do if you get medical bills wrongfully sent to collections? We will answer all of these questions and more, but first, let’s look at how and why medical bills get sent to collections.

Why do doctors have medical bills sent to collections?

When you receive a medical bill in the mail, it will include a due date. If you cannot pay the amount in full by the due date, you may have options through your health insurance, your doctor, or the medical facility that sent the bill to pay in installments over time. However, your medical bill will likely be sent to collections if:

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  • You don’t pay the medical bill in full by the due date,
  • You miss one or more of the payments agreed upon in your payment plan, or
  • It’s been anywhere between 30-180 days since your last payment and the debt has not been fully paid.

In rare cases, a clerical error could result in medical bills wrongfully sent to collections. Perhaps you paid the bill, but for one reason or another, the payment was not received or recorded. In these cases, you will need to contact your insurance provider, your doctor, and the medical facility to show proof of payment and have the debt removed.

If your doctor or medical facility does not expect you to pay back your medical debt, they will sell the debt off to a collection agency. Generally, you will receive a phone call as soon as the debt goes to collections. You will likely receive an official letter a few days later with instructions on how to pay or dispute the bill.

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What happens if a medical bill goes to collections?

Once the doctor has your medical bill sent to collections, you are expected to pay the debt back. The collection agency will pursue payment until the debt has been paid, but they are not allowed to harass or intimidate you. They will simply contact you on a regular basis to inquire about payments. You have the right to send a cease and desist letter to prevent future contact with the collection agency.

How to negotiate medical bills in collections

If you have a huge medical bill that you will struggle to pay off, it’s best to negotiate with your doctor and healthcare provider to lower the cost before it goes to collections. Once it goes to collections, you can still negotiate the bill, including the total amount, how often you pay, and how long you have to pay the full amount.

You will need to contact the collection agency directly to negotiate your medical bill. Unfortunately, you probably won’t be able to make extreme changes (like cutting the total amount in half), but you can save yourself some money and make the payment process easier. It’s important to remember that collection agencies cannot charge interest on medical debt, so you don’t need to worry about accumulated interest if you need to pay back the debt slowly. In most cases, the best course of action is to figure out how to pay off medical debt in collections through negotiations and a reasonable payment plan.

What happens if a medical bill goes to collections and I don’t pay it?

The consequences of not paying medical bills can be severe. While you have certain rights, collections agencies have rights, too. A collection agency has the right to record the debt on your credit report. This is the most common consequence of having your medical bill sent to collections. Your credit score will almost certainly take a huge hit, making it harder for you to borrow money in the future. 

Additionally, if you make no effort to negotiate with or make payments to the collection agency, they can go through the court system to sue you. If the court rules in favor of the collection agency, you will be legally obligated to pay back the debt. You might even have part of your wages garnished until the debt has been paid.

However, unpaid medical debt does not always end in legal battles. Every state has different medical debt collection laws. In most states, there’s a statute of limitations that sets a time period after which you have little incentive to repay the debt. This period is different in each state, but the statute of limitations can be anywhere between 3-15 years.

Once the statute of limitations has passed, the collection agency may choose to cease further action. After seven years, the debt will be removed from your credit report. However, waiting out the debt is not a reliable option. Having poor credit for seven years can make life difficult, not to mention the stress of knowing that the collection agency could pursue legal action before your state’s statute of limitations has passed.

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How to Get Medical Debt Forgiveness

If you know that you can’t pay back a medical bill and are worried about dealing with a collection agency, you do have a few options. You can apply for medical debt forgiveness through state programs or charitable organizations. This may not erase your debt entirely, but it could make it much more manageable. 

RIP Medical Debt is one charity that has helped millions of people overcome medical bills sent to collections. The organization even contacts credit reporting agencies to have the debt removed from your credit report. You can check out RIP Medical Debt’s website for more information. 

The Bottom Line

So, what happens if a medical bill goes to collections? First and foremost, your credit score drops. Then, you will be contacted to arrange payments. If you have a medical bill that you can’t pay or a medical bill that has already been sent to collections, don’t stress. Collection agencies don’t want to litigate; they just want you to pay back the debt. Before (and after) your medical bill goes to collections, try to negotiate your bill to make it easier to pay. If you still have trouble paying your bills, there are various laws, programs, and charitable organizations to help you overcome your medical debt.

In any case, if you’ve had a medical bill sent to collections and want to know more about your legal rights, check out our guide to free legal aid in all 50 states!

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Matthew Jones is a freelance writer with a B.A. in Film and Philosophy. You can check out his blog at Philosophy in Film.