FDCPA Protections Apply
When medical debt is sold to or placed with a third-party collection agency, all FDCPA protections apply. The collector must validate the debt, respect cease and desist requests, avoid harassment, and follow all FDCPA rules. Medical debt collectors are among the most frequent FDCPA violators -- document every contact.
Hospital Collection Practices
Hospitals collecting their own debts are NOT covered by the FDCPA (they are original creditors). However, nonprofit hospitals are limited by Section 501(r) of the IRC, and many states have specific laws governing hospital collection practices. Some states prohibit hospitals from placing liens on patients' homes, garnishing wages below a threshold, or suing patients below a certain income level.
State-Specific Protections
Many states have enacted medical debt collection protections: Colorado prohibits debt collection on medical debt less than 6 months old. California limits interest on medical debt and requires providers to offer payment plans. New York prohibits aggressive collection tactics and requires financial aid screening. Oregon protects low-income patients from medical debt collection entirely.
Your Action Plan
If facing medical debt collection: (1) verify the debt is yours and the amount is correct. (2) Check if the hospital has a charity care program. (3) Send a cease and desist if the collector is harassing you. (4) Negotiate a settlement or payment plan. (5) If overwhelmed, consult a bankruptcy attorney. (6) Report violations to the CFPB and your state AG.
Frequently Asked Questions
Can a medical collector call my family about my bills?
No. FDCPA third-party contact rules prohibit this. A collector can contact third parties only once for location purposes and cannot reveal the debt. Each violation can result in $1,000 in statutory damages.
Can medical debt lead to wage garnishment?
Only after a lawsuit and court judgment. The collector must sue, win, and then obtain a garnishment order. This process takes months. Bankruptcy stops garnishment immediately.
Is there a statute of limitations on medical debt?
Yes. The statute of limitations varies by state (typically 3-6 years for written contracts). After it expires, the collector cannot successfully sue you. Check your state's limit at debtstatuteoflimitations.com.
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