Medical Debt Statute of Limitations
The statute of limitations for Medical Debt puts a limit on the length of time something can occur. In the case of debt, a statute of limitations allows creditor to take legal action only within a certain window of time. This way they are not allowed to pursue you for a debt you haven’t repaid for the rest of your life.
Statutes of limitations vary from state to state, with Texas being one of the most generous for consumers at four years. According to the Civil Practice & Remedies Code – Chapter 16, Section 004, if you are a resident of the state, creditors have only four years in which to take legal action if you do not repay a debt. Debt tied to written or oral agreements, as well as promissory notes and open ended accounts fall under these parameters.
In addition to limiting the time creditors have to ask, Texas further protects consumers by starting the clock on the statute of limitations the day the last payment was made on the debt, called the date of last activity (DLA). Other states do not start the clock until the account is charged off.
Debt Collectors Can Be Unscrupulous
Since debt collectors often try to take advantage of consumers by misreporting the date of last activity or trying to collect on a debt despite the statute of limitations having expired, it’s important to verify the DLA before taking action on a debt. To check the DLA, you can review your consumer credit report, request a certified letter from the debt collection agency regarding the date, or request copies of your payment records from your bank regarding the date in which the most recent payment was made.
Keep in mind, if you make a payment on an account with an expired statute of limitations, it starts the clock ticking again. Bringing a debt “current” means the debt collection agency will have an additional four years to take legal action against you concerning a debt.
It’s also important to realize that a debt collector might still attempt to take action against you concerning an expired debt. In order to prevent the resetting of the debt through a default judgement, you are required to respond to the lawsuit, even if the statute of limitations has run out.
If you receive notice that a debt collector is taking legal action against you regarding a debt on which the statute of limitations has expired, you should contact an attorney. You are not legally obligated to pay an expired debt, but you could become liable again if you allow a default judgment to occur.
In simple terms, you need to fight back against legal action on an expired debt. You will win the case and prevent a reset and re-upping of your obligation.
Medical Debt in Texas
The statute of limitations in Texas applies to a variety of different types of debt, which includes medical debts. This is great news for consumers because medical debt is often what drives people into financial turmoil. Some studies have shown that well over half of all bankruptcies are caused by medical debt.
Medical debt can arise from just about any type of health issue.
Often, people who are diagnosed with serious illnesses that require long-term medical treatment find that mounting medical bills cause them as much stress and anxiety as the illness itself. But long-term medical issues are not the only way to accumulate medical debt.
An unexpected accident or even an overnight stay in the hospital for a health concern that turns out to not be that serious can leave you with tens of thousands of dollars in medical bills.
Medical debt is one of the most serious issues facing American consumers today.
Medical Debt and Your Credit Report
Unpaid medical bills affect your credit, just the same as other types of debt. Medical debt remains on your credit report for at least seven years – longer than the statute of limitations in Texas.
Generally, the only way credit reporting agencies will remove medical debt from a credit report is if the insurance company pays the balance in full, the patient pays the balance in full, or the patient and the creditor reach a settlement. In this case the entire balance might not be paid in full, but it is classified as such on the credit report because the creditor reports to the credit agency the debt obligation was met.
Should a medical debt remain unpaid, it stays on your credit report for at least seven years from the time of the first delinquency. This time frame also applies to judgements against you. Should a debt collector seek and be granted a judgement, this will remain on your credit report for seven years after the filing date, which can occur years after the initial delinquency – not to mention years after you actually underwent medical treatment or spent time in the hospital.
Haunted By Medical Debt?
Despite the generous statute of limitations in Texas, medical debt can haunt you well beyond the time the debt collector can legally compel you to repay the debt. Debt collectors can also use what you don’t know about the statute of limitations against you, causing you to be once against legally liable for the debt.
It’s important to not ignore medical debt. Though it’s possible you might no longer be legally forced to make payments on the debt, you need to be sure this is the case. You also need to understand how not paying the debt can still affect you, even though it’s within your rights not to make payments on expired debts. What you do and don’t do can hurt you, so it’s important to understand how debt collection laws apply to your circumstances.
If you are concerned about medical debt or you have questions about the medical debt statute of limitations in Texas, we can help. We’re able to provide guidance on how best to deal with medical debt, and in extreme cases when medical debt is crippling, we can offer options which might include filing for bankruptcy. For more information or to schedule a consultation to discuss your medical debt, contact 1.800.220.4318.