What is the Statute of Limitations for Medical Debt?

Medical debt is a major problem for millions of Americans. It has been one of the leading causes of bankruptcy, and the sky-high costs of medical treatment are well documented. There are steps you can take to keep your medical bills in check, however that may not be much consolation if you have already accumulated significant medical debt.
Like with any debt, you will want to make a game plan for how to manage it and meet your obligations. Of course, this includes the usual strategies like budgeting and cutting costs in order to free up your income.
However, you will also want to know your rights when it comes to medical debt. One important thing to be aware of is the statute of limitations, which will be determined by your state’s law. Let’s take a look at more specifics.
What are Statutes of Limitations?
If you aren’t familiar with this concept, the term “statute of limitations” (sometimes shortened to “SOL”) may seem confusing, and it certainly is a mouthful. It’s actually quite simple, though. A “statute” is a written law, and “limitations” refers to the “limit” related to when a claim can be brought in court. So, the statute of limitations essentially refers to the time limit for which someone can sue about a particular issue.
That may be a slight oversimplification, however, because in practice the statute of limitations functions as a defense in court rather than an automatic way to prevent a party from suing. In other words, if Party A sues Party B for a medical debt that is past the statute of limitations, Party B will not automatically win. Party B should seek the counsel of an attorney, and will need to appropriately acknowledge and respond to the lawsuit and raise the statute of limitations as an issue.
This quirk is one reason why “zombie debt” can be so problematic. In some cases, people don’t legally owe a debt anymore, but a creditor is able to bring it back to life by suing the debtor or even threatening the debtor into making a promise to pay (even after the SOL). Note: in most cases, a creditor may still contact you about a debt even after the SOL has passed.
Which Statute of Limitations is Relevant?
Every state has its own statutes of limitations for different types of debt. These typically include written contracts, oral contracts, promissory notes, and open-ended contracts. In many cases, the statute of limitations will vary depending on which category a given debt falls under.
In most cases, medical debt is considered a written contract. After all, think about all the paperwork you typically fill out when going to the doctor! According to NOLO, the statute of limitations for written contracts ranges from three years to ten years across states. Check out this chart and consider double checking it against your states’ law (and read below about how some states are adding new SOLs for medical debt).
Why a Shorter SOL is more Favorable
A shorter statute of limitations is considered more consumer-friendly. By shortening the window of time in which you can be sued, a short SOL provides greater certainty. In states with long SOLs, consumers may have the rude surprise of a last-minute lawsuit after nearly 10 years of a creditor not taking action on a given debt. A shorter SOL forces the creditor to take action sooner, and if it doesn’t then the consumer can have some peace of mind about their legal rights.
With this in mind, some states are beginning to pass SOLs for medical debts specifically, rather than essentially bundling medical debts in with the broader category of written contracts. New York made such a legislative change in 2020, reducing its statute of limitations on medical debt to three years.
Know Your Rights
If you find yourself in a position where you need to know the statute of limitations, you could consult the chart linked previously in this article and do additional research into your state law to confirm that it is correct. Also, consider contacting an attorney or local legal aid organization if you are unsure. It is very important to remember your rights and be prepared for creditors to continue contacting you. Make sure you understand the pitfalls surrounding so-called “zombie debt” and are ready for any communications about debts you owe or owed previously.
For more help with your debt management, remember that our certified credit counselors are here to help. You can get started with a no-cost counseling session today.