Is There a Statute of Limitation on Medical Bills?
According to a recent survey by Experian, the average American has more than 90 thousand in consumer debt. If you’re one of the millions who’ve fallen behind, you may wonder how far those collectors can go to get payment.
The good news is that something called the Fair Debt Collection Practices Act can prevent specific collections from reaching court. The bad news is not all debts are covered under this legislation.
Is there a statute of limitations on medical bills? Continue reading to find out everything you need to know about medical debt collection laws.
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The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is the legislature covering debts. This act places a statute of limitations on specific forms of debts, meaning collectors can’t bring you to court after a certain time has passed. It’s important to understand that not all debts are covered under this act.
Only “Consumer Debts” Are Covered Under the FDCPA
Only consumer debts are covered under the FDCPA. “Consumer debts” are defined as personal transactions in nature. The term “personal transactions” refers to a contract entered into by a person and a merchant. For example, if you learned more about Rightway Funding and entered into an agreement with them, this would be a personal transaction.
In some cases, there may not be any physical contract. Instead, there’s an assumed contract based on common knowledge. This could be the case if you received emergency hospital care but were unable to physically sign an agreement before receiving treatment.
The FDCPA doesn’t cover debts that aren’t personal transactions, so the same laws don’t apply to them. A few common non-transaction debts include traffic tickets, general municipal fees, and fines.
These Are the Most Common Types of Consumer Debts
Although many things could fall under the category of consumer debts, a few are significantly more common than others. The most common include:
- Utility bills
- Credit card bills and debts
- Medical bills
- Student loans
- Cell phone bills
- Bank overdraft fees
- Auto loans
- Personal and payday loans
These are only the most common forms of consumer debts. If you’re not sure if a debt falls under the FDCPA, it’s best to consult with an attorney.
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Understanding the Statute of Limitations on Medical Bills
Is there a statute of limitations on medical bills? The answer is yes because it’s considered a personal transaction. But it’s essential to understand the statute of limitations (SOL) and what it actually means.
The exact SOL for medical bills varies from one state to the next. In Florida, for example, it’s five years. Other states may have a four or six-year SOL, so it’s essential to verify the exact length of time for your state.
A statute of limitations only means the debt collector can’t sue you for the money owed. An SOL doesn’t absolve your obligation or make creditors drop the information from your credit report.
Is There a Statute of Limitation on Medical Bills? Now You Know the Answer Is “Yes!”
Now you know the answer to “is there a statute of limitation on medical bills.” The answer is yes, but this only stops debt collectors from taking you to court. It’s still important to pay your obligations if you want to raise your credit score or improve your financial health.
Do you have more questions? Check out our other blog posts. You’ll find a wealth of information on related topics.