Can you be sued by a debt collector for unpaid medical bills?

Medical debt has become a serious issue nationwide, despite recent changes to credit reporting rules that have removed medical collections in amounts under $500 from consumer credit reports. As health care prices continue to climb and more Americans struggle with their out-of-pocket costs, the medical debt issues are compounding. Insurers are also shifting more costs to patients, and, as a result, even a single hospital visit can result in trying to juggle medical payments that you can't easily keep up with. 

That debt-related stress often intensifies, though, once the unpaid medical bills begin to age. First come the notices from the provider. Then come the follow-up calls. And eventually, if the balance remains unpaid, many people will learn firsthand that a medical bill can be sold or sent to a collection agency. At that stage, the tone of communication can shift, and the stakes may feel a lot higher. After all, debt collectors have a wide range of tools at their disposal beyond phone calls and letters, including legal action. 

But while debt collection agencies regularly take people to court for things like unpaid credit card bills, can you really be sued over unpaid medical bills? And what options do you have for dealing with this type of debt? That's what we'll explore below.

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Can you be sued by a debt collector for unpaid medical bills?

Yes, debt collectors can sue you for unpaid medical bills, and these lawsuits are a lot more common than many people realize. When a debt collector purchases your medical debt from the original healthcare provider, they acquire the legal right to pursue their collection efforts through the courts. If they decide to file a lawsuit, you'll receive a legal notice requiring you to respond within a specific timeframe, typically 20 to 30 days, depending on your state.

If you fail to respond to the lawsuit or don't appear in court, the debt collector can win a default judgment against you. This judgment gives them significant power to collect the debt, including the ability to garnish your wages, place liens on your property or freeze your bank accounts in many states. The original medical debt can also grow substantially through the legal process, as court costs, attorney fees and interest get added to what you already owe.

However, a lawsuit typically isn't the first step a debt collector will take. Both medical providers and debt collection agencies will typically attempt multiple rounds of communication before turning to the court system. Lawsuits require time, documentation and money, so debt collectors generally weigh whether the amount owed justifies the effort. Larger balances, repeated attempts at contact and older debts nearing the statute of limitations are more likely to trigger legal action. If a debt collector decides to sue you, though, here's what else you should know:

Documentation is key. Before a lawsuit proceeds, the debt collector must provide proof that the debt is valid and that they have the legal right to collect it. Errors in billing, insurance processing or patient identification are common, so reviewing your paperwork carefully and taking steps to verify the debt is essential.

The statute of limitations matters. Each state has its own time limit for how long a debt collector can sue over medical debt. Once that window closes, the debt becomes "time-barred." Debt collectors may still ask you to pay, but they typically cannot sue you for it. Be cautious, though. Making a small payment or acknowledging the debt in writing can restart the clock in some states, allowing debt collectors more room and more avenues to collect the money owed.

A court judgment can lead to serious consequences. If the debt collector wins the lawsuit, either by default or otherwise, the court may allow them to take additional steps to collect. This can happen in numerous forms, whether it's garnishing part of your paycheck (in states where it's allowed), placing a lien on a property or freezing certain bank accounts.

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What to do if you're facing medical debt you can't afford

Here are some steps to consider if your medical bills are piling up or if debt collectors are already contacting you:

Ask for an itemized bill and check for errors. Medical billing mistakes are surprisingly common. You may be charged for things like services you didn't receive, duplicate items or procedures your insurance should have covered. Requesting an itemized statement can help you dispute incorrect charges and reduce the total amount owed.

Talk to the provider about financial assistance. Hospitals, nonprofit medical systems and many private providers offer financial assistance programs or income-based discounts to those who qualify. Some also provide zero-interest payment plans that can make the debt more manageable.

Negotiate with the debt collector. Debt collectors often have room to settle medical debt for less than the full amount, especially if they purchased the debt for a fraction of its value. A lump-sum settlement or structured payment plan may be possible.

Consider professional debt relief help. If your medical bills are part of a larger financial burden, or if multiple accounts are already in collections, working with a debt relief expert may help. These experts can negotiate with creditors on your behalf, potentially lowering the total amount you owe and consolidating payments into one predictable monthly amount. 

The bottom line

Being sued over medical debt is possible, but it's not inevitable. Most providers and debt collectors prefer to resolve accounts before turning to court because lawsuits cost time and money. Still, ignoring bills or collection notices can increase the risk, especially if the balance is high or the debt is aging. The sooner you explore assistance programs, negotiate or enlist professional help, the more options you'll have.