More than 40 million Americans are saddled with medical debt. With the cost of healthcare on the rise and insurance coverage on shaky ground for many working class people, it’s becoming harder and harder to pay hospital bills for unexpected emergencies or even routine (but costly) treatments. So exactly what does happen when you have unpaid medical bills? If you can’t pay your medical bills on time and in full, here’s what you should expect.
Unpaid Medical Bills: What Happens If You Don’t Pay Late Fees and Interest
When you first receive a medical bill, it should include an issuance date or the date on which you were charged for the services rendered. If you fail to pay after a certain period of time beyond this date, then you could be subject to late fees and interest payments on your medical bill. However, the good news is that — unlike many other forms of debt — late fees and interest are not a given on your medical bills. Depending on the laws of your state, medical providers may be banned from tacking on late fees to medical bills or charging interest rates beyond a certain level. If you can be charged for late fees or interest, then it should be stated in the terms of service up front. Make sure to read any paperwork that you’re provided with carefully before agreeing to treatment.
Collections and Your Credit Score
Of course, M is rarely an option. In the case of an emergency or a medically necessary service, it’s not always an option to refuse services just because payment might be difficult. Even if medical providers can’t hit you with late fees, that doesn’t mean that you should hold off forever when it comes to paying your medical bills. If you start to carry medical debt and show no signs of paying it off, your provider may send your bill to a debt collections agency. Debt collectors specialize in being annoying in an effort to get you to repay your medical debt. However, having your medical debt go to a collections agency can have real and lasting consequences — as soon as a medical bill goes to collections, it will show up on your credit report. The bottom line is that your medical bills can tank your credit score if they go unpaid.
Lawsuits, Judgments, and Jail
If the collections agency isn’t able to get anything out of you, then your medical debt problem could move on the final phase, where legal action is taken against you. Your medical provider could sue you for your unpaid medical bills and a court could authorize measures like wage garnishment — where money can be taken straight from your wages to pay your debts — in order to appease them. Thankfully, you cannot be sent to jail for failing to pay your medical bills. By law, someone cannot be imprisoned for failing to pay any civil debt. However, that same protection doesn’t exist for government-imposed expenses like taxes.