What Steps Should I Take to Manage My Medical Debt?

Medical debt can be overwhelming. However, there are several steps you can take to manage your medical debt before considering bankruptcy.

Firstly, review your medical bills thoroughly. Medical billing errors are not uncommon, and you might be charged for services you didn’t receive or billed more than you should have been.

Secondly, you can negotiate your medical bills. Many healthcare providers are willing to work with patients who are struggling to pay their bills. They might offer a payment plan, reduce the amount you owe, or even forgive some of your debt. Don’t be afraid to ask for help; it’s better to negotiate than to ignore the bills and let them pile up.

Thirdly, consider applying for financial aid or charity care programs. Many hospitals and healthcare providers offer these programs to help patients who can’t afford their medical bills. You might qualify based on your income, family size, and other factors.

Lastly, you can consolidate your medical debt. This involves taking out a loan to pay off all your medical bills, then making monthly payments on the loan.

What Are the North Carolina Laws Regarding Medical Debt?

In North Carolina, medical debt is treated as a civil matter, not a criminal one. This means you can’t be arrested or jailed for not paying your medical bills. However, healthcare providers can sue you for unpaid bills, and if they win, they can garnish your wages for certain medical debt or put a lien on your home or land or other real property.

North Carolina law also has a statute of limitations on medical debt. This is the amount of time a healthcare provider has to sue you for unpaid bills. In North Carolina, the statute of limitations for medical debt is three years from the date of the last payment.

What Are the Consequences of Not Paying My Medical Debt?

If you fail to pay your medical debt, the consequences can be severe. Initially, your healthcare provider or their billing company will likely send you reminders and then more formal demand letters. If you still don’t pay, they may turn your account over to a collection agency. This can negatively impact your credit score, making it more difficult for you to get loans or credit cards in the future.

In North Carolina, if you don’t pay your medical debt, the healthcare provider can sue you. If they win the lawsuit, they can garnish your wages for certain medical debt, meaning they can take a portion of your income directly from your paycheck to pay off the debt. They can also put a lien on your home, land or other real property, which means they have a legal claim to it until the debt is paid.

However, North Carolina law protects certain assets from being seized to pay off medical debt. This includes your primary residence (up to $35,000 in value), your car (up to $3,500 in value), and up to $5,000 worth of household goods. These are called exemptions and can be best explained by a North Carolina attorney.

What Should I Do If I’m Sued for Medical Debt?

If you’re sued for medical debt in North Carolina, respond to the lawsuit promptly. Ignoring it won’t make it go away; in fact, it could result in a default judgment against you, which means the healthcare provider automatically wins the lawsuit. You should consult with an experienced attorney as soon as possible.

If you’re sued, you might be able to defend yourself by challenging the amount of the debt or the healthcare provider’s right to collect it.

Should I Consider Bankruptcy to Manage My Medical Debt?

Bankruptcy should be a last resort for managing medical debt, but in some cases, it might be the best option. If your medical debt is so overwhelming that you can’t afford to pay it off, even with a payment plan or financial aid, bankruptcy might provide a way out.

Bankruptcy can have consequences. An experienced attorney can help you understand the pros and cons of the two types of personal bankruptcy, Chapter 7 and Chapter 13, and decide if one of these is the right choice for you.

Can Medical Debt Be Erased?

In some cases, medical debt can be erased or forgiven. Some healthcare providers offer charity care programs that can forgive a portion or all of your medical debt if you meet certain income and asset criteria.

If your medical debt is sold to a collection agency, there’s a chance it could be erased. Some collection agencies buy medical debt for pennies on the dollar and then try to collect the full amount from the patient. If they’re unable to collect, they might eventually write off the debt as a loss.

However, having debt erased can have tax implications. The IRS generally considers forgiven or discharged debt as income, and you may have to pay taxes on it.

Statute of Limitations for Medical Bills

The statute of limitations for medical bills is a crucial legal timeframe that determines how long healthcare providers or debt collectors have to take legal action to collect unpaid medical debt. In most states, this period ranges from three to six years, but it can vary depending on the state laws and the type of agreement involved, such as written contracts or oral agreements.

Understanding when the statute of limitations expires is essential for patients to protect themselves from lawsuits filed after this period.

The clock for the statute of limitations typically starts ticking from the date of the last payment made on the medical bill or the date the debt became delinquent. If the statute of limitations expires, medical debt collectors and healthcare providers lose the legal right to sue for the unpaid debt.

However, it is important to note that the debt itself does not disappear; it may still appear on the patient’s credit report and affect their credit score for up to seven years under the Fair Credit Reporting Act.

Patients should be cautious when contacted by debt collectors, especially third party debt collectors, as any payment or acknowledgment of the debt can reset the statute of limitations, extending the time creditors have to pursue legal action. It is advisable to verify the age of the debt and consult with an experienced law firm or attorney before making any payments or agreements.

Additionally, federal and state laws regulate how medical debt is reported and collected, providing protections against unfair collection efforts and unexpected medical bills. For example, the No Surprises Act requires healthcare providers to give uninsured patients a good faith estimate of medical costs before treatment and limits surprise billing from out-of-network providers.

Knowing your rights and the statute of limitations can help you manage overwhelming medical debt effectively, avoid unnecessary legal disputes, and explore financial assistance programs or payment plans offered by nonprofit hospitals and healthcare providers.

Can I Be Sued for Medical Debt?

Yes, you can be sued for medical debt if you fail to pay your medical bills. Healthcare providers and debt collectors have the legal right to pursue a debt collection lawsuit to recover unpaid medical debt. This means they can file a lawsuit against you in court to obtain a judgment that requires you to pay the outstanding amount.

Once a lawsuit is filed, it is crucial to respond promptly to avoid a default judgment, which occurs if you ignore the court summons. A default judgment means the court automatically rules in favor of the healthcare provider or debt collector, allowing them to take further legal actions such as wage garnishment or placing a lien on your property.

The risk of being sued can be influenced by the amount of unpaid medical debt and the policies of the healthcare provider or collection agency. Some providers may choose to work out payment plans or negotiate settlements before resorting to legal action, while others may pursue lawsuits more aggressively.

It is important to understand that even if the statute of limitations for medical bills has expired, meaning the legal timeframe to sue has passed, debt collectors might still attempt to file a lawsuit. In such cases, you can use the statute of limitations as a defense to have the case dismissed.

Being sued for medical debt can be stressful and overwhelming, but you have rights and options. Seeking legal assistance early can help you navigate the process, protect your assets, and potentially negotiate a resolution that fits your financial situation.

If you are sued for medical debt, responding promptly and seeking legal assistance can prevent wage garnishment and other severe consequences.

How Can an Experienced Attorney Help Me Manage My Medical Debt?

An attorney can explain the statute of limitations, what assets are protected, and what happens if you’re sued for unpaid medical bills.

If you’re considering bankruptcy, an attorney can guide you through the process, which can be complex and confusing without legal assistance. Managing medical debt can be stressful and overwhelming, but you don’t have to do it alone.

If you’re struggling with medical debt, call Gillespie & Murphy, P.A. today at for a free consultation.