Hospital Debt Statute of Limitations

Hospital Debt Statute of Limitations

The statute of limitations for Hospital Debt varies from state to state.  In Texas the timeframe is four years.  The statute of limitations means the original creditor and any third-party debt collectors only have a limited amount of time in which they can pursue repayment of the debt by filing a lawsuit.  They can still call you and try to collect for as long as they want.  The statute of limitations only applies to filing a lawsuit.

Before you decide to sit back and wait for a medical bill to grow old, there’s a few important things you need to understand.

How the Statute of Limitations Works

There are limitations concerning how long debt collectors can attempt to collect on a debt. The timeframe varies from state to state, but it’s important to realize that you play a role in how long a debt collector has to collect on a debt.

So, for instance, the statute of limitations on medical debt in Texas is four years. So let’s say you have an unpaid medical bill from three years ago. At that four year mark, the original creditor (hospital, doctor, etc.), as well as any third-party debt collectors, will no longer be able to legally pursue collection of the debt by filing a lawsuit.

Debt collectors know a lot of people aren’t aware of the statute of limitations, and they take advantage of this whenever possible. They know that if they can get you to make a payment on an older debt, it “refreshes” your obligation to pay and gives them more time to pursue legal action.

So, for example, at that three year mark, let’s say a debt collector contacts you and pressures you into making a payment on the debt. This essentially re-ups the statute of limitations clock and you’re in for another four years of being legally obligated to pay the debt – and opens the door for debt collectors to take legal action against you.

If you have hospital debt or debt of any kinds, it’s important to realize two things about the statute of limitations:

1. It protects you from being pursued for years on end by debt collectors with lawsuits.
2. It doesn’t mean you don’t still owe the debt, but it does mean you won’t face legal action related to the debt.
3. The debt can still stay on your credit report for 7 years.

How Unpaid Medical Bills Affect Your Credit Report

Like all debt, medical bills are listed on your credit report. Whether or not a debt is or ever has been past due is also listed. The statute of limitations for paying a debt has no direct effect on the time a debt remains on your credit report, but how you deal with the debt over time is linked to the length of time it’s visible on your report.

Medical debt that is in collections remains on your credit report for at least seven years. After that time, it might no longer be visible on your credit report, unless the creditor seeks a judgement against you during that time.

When you pay a hospital bill it should be updated on your credit and taken out of collection.  It may be deleted from your credit as well depending on the circumstances.  You should confirm before paying anything how the account will be reflected on your credit report after you pay.

Understanding the statute of limitations concerning hospital debt can help you make a decision about how to handle the situation. Despite the damage medical debt can do to your credit, there are instances in which it would be more advantageous for you to disregard collection efforts. Much of what you should do and shouldn’t do concerning hospital debts comes down to timing.

If you’d like to know more about the statute of limitations on hospital debt or you have questions about medical debt in general, we can help. Contact us 1.800.220.4318 to schedule a consultation.