In law, the “statute of limitations” is the deadline for bringing a claim or case. If a creditor wishes to sue a debtor in order to collect a debt, such as a medical bill resulting from a surgery or hospital visit, the creditor must sue before the statute of limitations runs out of time. If the creditor misses the deadline and the statute of limitations expires, the claim will be time-barred, which means the creditor will be unable to file a lawsuit. However, waiting for the statute of limitations to expire is seldom an efficient or practical strategy for dealing with medical debt. It may be more useful to consult a Sacramento bankruptcy lawyer, who can help you reduce or eliminate medical debt by filing for Chapter 7, Chapter 13, or in rare cases, Chapter 11.
How Long Can Debt Collectors Come After You for Medical Bills?
The answer to this question depends on where you live, as each state has a different set of statutes of limitations. Generally speaking, they range anywhere from approximately one to six years, depending on the nature of the claim and the state in which it is being filed.
With respect to the collection of medical debt, the applicable statute of limitations is the statute of limitations for breach (violation) of written contract. In California, the statute of limitations for breach of written contract is typically four years. The clock starts counting down from either the most recent payment date, or the date on which the breach occurred – whichever happened later.
If a hospital, clinic, dental office, or other type of treatment center determines that you have breached your contract by failing to pay your bill, the facility may employ various debt collection tactics, such as contacting you over the phone. If initial attempts to collect the debt prove unsuccessful, the facility may turn to a debt collection attorney to file a lawsuit against you. However, the claim would be time-barred if the statute of limitations has expired.
It’s also important to note that state law affords some additional protection to patients in California. Under state law, hospitals must allow a 150-day negotiation period, which is roughly equivalent to five months, for the determination of a payment plan. The hospital that treated you may not send your medical bills to a debt collection agency until the 150-day period has elapsed.
CA Debt Collection Laws
There are strict consumer protection laws defining legal and illegal debt collection tactics. The most prominent example is the Fair Debt Collection Practices Act (FDCPA), a federal law passed during the late 1970s to protect consumers from abusive or deceptive debt collection practices.
The FDCPA, which broadly applies to many types of consumer debts, prohibits numerous consumer debt collection strategies. To provide a few examples, the FDCPA makes it illegal for debt collectors to:
- Call repeatedly for the purpose of causing annoyance or distress.
- Make threats of any kind.
- Pretend to be lawyers, credit reporting company representatives, or government representatives.
- Use abusive or obscene language.
At the state level, California has enacted its own laws to strengthen the FDCPA. The California Fair Debt Collection Practices Act (CFDCPA), which is also called the Rosenthal Fair Debt Collection Practices Act, contains provisions similar to those contained in the federal version of the law.
Unfortunately, it is common for debt collectors to ignore state and federal debt collection laws. If you believe that you have been a victim of creditor harassment, you should consult with an attorney right away. If a creditor violated the FDCPA or other debt collection laws, you may be entitled to “damages” (compensation).
Sacramento Bankruptcy Lawyers Can Help You Erase Medical Debt
It is a valid defense to argue that the statute of limitations has expired. However, this is seldom a practical strategy for debtors. Depending on when the debt was incurred, it could take months or even years before the statute of limitations runs out. In the meantime, the debt will continue to negatively affect your credit score, which will simply worsen any financial difficulties you are currently experiencing.
If you are worried about medical debts that you cannot afford to repay, it may be the right time to consider filing for bankruptcy, which can give you the opportunity to reduce or wipe out your medical debts. In addition, filing bankruptcy will also give you the protection of the “automatic stay.” The automatic stay, which takes immediate effect, is a court order that, with some exceptions, prohibits your creditors from initiating collection actions while your bankruptcy case is in progress.
If you think you may be ready to explore bankruptcy as a strategy for debt relief, turn to The Bankruptcy Group for experience-driven, detail-oriented guidance you can trust. Our knowledgeable legal team includes California Chapter 7 lawyers, Chapter 13 bankruptcy attorneys, and Chapter 11 bankruptcy attorneys serving the Sacramento area. For a free bankruptcy consultation, contact our law offices at (800) 920-5351.