What Happens If I Never Pay My Medical Bills?

Medical bills can be a significant source of financial stress for individuals and families across the United States. Many Americans face challenges in affording healthcare, contributing to an estimated $220 billion in medical debt nationwide. This financial burden affects millions, often unexpectedly, due to the complex and fragmented nature of the U.S. healthcare billing system. Understanding the process and potential consequences of unpaid medical bills can help individuals navigate these often confusing circumstances.

Understanding Initial Overdue Bill Stages

When a medical bill becomes overdue, the healthcare provider typically begins its internal collection process before escalating the debt. Initially, patients may receive reminder notices through mail, serving as prompts for the outstanding balance. The provider’s billing department may also initiate phone calls to reach out directly to the patient. These calls represent an effort to resolve the bill without involving third parties, often offering opportunities to clarify charges or establish a payment plan. Providers generally prefer to collect directly, as it allows them to retain a larger portion of the billed amount.

This initial stage allows patients to address billing errors or misunderstandings directly with the provider. Many hospitals and healthcare facilities will not immediately send a bill to collections, often waiting between 90 and 180 days after the initial billing date. Engaging with the provider during this period can lead to a resolution, such as negotiating a lower amount or setting up an affordable payment schedule.

How Unpaid Medical Bills Affect Your Credit

Unpaid medical bills can impact an individual’s credit report and score, although recent changes have introduced new protections. Historically, medical debt could significantly lower credit scores. Major credit reporting agencies have implemented new rules regarding how medical debt appears on credit reports.

As of July 2022, paid medical collection debt is no longer included on consumer credit reports. Once a medical bill sent to collections is satisfied, it should be removed from the credit file. Starting in April 2023, unpaid medical debts with an initial reported balance under $500 are also excluded from credit reports. These changes aim to reduce the negative impact of smaller or resolved medical debts on creditworthiness.

A waiting period exists before unpaid medical debt can be reported to credit bureaus. As of July 2022, this period was extended to one year from the date the account became delinquent. This provides consumers more time to address billing issues or work out payment arrangements. Although a 2025 CFPB rule aimed to ban all medical debt from credit reports, it was blocked by a federal judge. Unpaid medical debt over $500 can still appear on credit reports and may remain for up to seven years.

When Medical Debt Goes to Collections

If medical bills remain unpaid, the healthcare provider may sell or transfer the debt to a third-party collection agency. These agencies will contact the individual through various methods, including phone calls and letters, to secure payment.

Consumers have specific rights when dealing with debt collectors under the Fair Debt Collection Practices Act (FDCPA). This federal law protects individuals from abusive, unfair, or deceptive debt collection practices. For instance, debt collectors are prohibited from using harassment or making abusive calls.

Individuals also have the right to dispute the debt or request verification. Upon receiving a dispute, the collection agency must cease collection efforts until they provide proof of the debt. Debt collectors cannot report the debt to credit bureaus without first attempting to collect directly from the consumer.

Legal Ramifications of Unpaid Medical Debt

While many unpaid medical debts are resolved through direct negotiation or collection agency efforts, some can escalate to legal action. Healthcare providers or collection agencies have the right to file a lawsuit against an individual to obtain a judgment for the unpaid debt. This step is generally less common for smaller debts, but remains a possibility if other collection attempts fail.

If a lawsuit is filed and the court rules in favor of the provider or collection agency, a legal judgment is issued. Consequences of a judgment can include wage garnishment, where a portion of the individual’s earnings is directly withheld by their employer to pay the debt.

Bank account levies are another potential outcome, allowing the creditor to seize funds directly from the individual’s bank accounts. Property liens, which place a legal claim against real estate, can also be imposed, potentially affecting the ability to sell or refinance property. Federal law places limits on how much of a person’s wages can be garnished, typically based on disposable earnings. Some states have also enacted laws that provide additional protections against wage garnishment or property liens for medical debt. Ignoring a lawsuit can lead to a default judgment, meaning the court automatically rules in favor of the creditor, making it more challenging to address the debt.