How does the new CFPB medical debt rule affect collections?

In January 2025, the CFPB finalized a rule removing medical debt from credit reports. As of the effective date, credit bureaus must remove existing medical debt tradelines and cannot add new ones. This means medical debt no longer appears on credit reports and cannot be used in credit scoring decisions. However, this does not eliminate the underlying debt — collectors can still contact you and sue within the statute of limitations.

What is 'zombie debt' and should I be worried about it?

Zombie debt is old debt — often past the statute of limitations — that debt buyers purchase and attempt to collect. Collectors sometimes send letters on zombie debt hoping you'll pay (or even accidentally reset the SOL by making a partial payment). Warning signs: the company is unfamiliar, the debt is vague or old, or the letter uses pressure tactics without specifying the original creditor. Always request debt validation in writing before paying anything on old debt.

Medical Debt Statute of Limitations by State (2026)

Q: What is the statute of limitations on medical debt?

The statute of limitations (SOL) on medical debt is the time period during which a creditor or debt collector can sue you in court to collect a debt. After the SOL expires, the debt is 'time-barred' — you can still owe the money morally, but the collector cannot win a lawsuit against you for it. The SOL varies by state, ranging from 2 years (some states) to 10 years (others), and the clock typically starts from the date of last payment or the date the bill was due.

Q: Does paying an old medical bill reset the statute of limitations?

Yes — in most states, making a payment on an old debt resets the statute of limitations clock. Even a small partial payment can restart the SOL from the date of that payment. Similarly, making a written promise to pay, or acknowledging the debt in writing, can reset the clock in some states. This is why you should be very careful about making any payment on old debt before checking your state's SOL rules.

Q: Can a debt collector sue me after the statute of limitations expires?

Collectors can sue you — courts won't automatically dismiss an expired debt. But you can raise the expired statute of limitations as a legal defense ('affirmative defense') in your response to the lawsuit. If you do not respond to a lawsuit, the collector will likely win a default judgment even on time-barred debt. Never ignore a lawsuit summons. File a response asserting the SOL defense and consider consulting a consumer attorney.

Medical debt weighs on roughly 100 million Americans — about 41% of adults, according to a 2022 KFF survey. But most people carrying that debt don’t know it has a legal expiration date. After the statute of limitations passes, collectors lose the power to sue you in court — and BillKarma’s review of bills referred to collections found that 38% contained billing errors that predated the collections referral, errors that should have been disputed before the debt was ever sold. Understanding your state’s rules can mean the difference between paying thousands you don’t legally owe and confidently moving on.

1. What is the statute of limitations on medical debt?

The statute of limitations (SOL) is the maximum time a creditor has to file a lawsuit against you in court for an unpaid debt. Once the SOL expires, the debt is called “time-barred.” You may still legally owe the money — the debt doesn’t disappear — but the collector cannot successfully sue you to collect it if you raise the SOL defense.

Medical debt is typically classified as either an open account (a running balance at a provider) or a written contract (if you signed a patient financial responsibility agreement), which affects which SOL applies in your state.

Being contacted about old medical debt? Upload your bill to BillKarma first — before paying anything, make sure the debt is accurate, not already paid, and within the statute of limitations for your state.

2. State-by-state statute of limitations on medical debt (2026)

Statutes of limitations vary significantly by state. The following applies to open accounts and written contracts — the most common categories for medical debt:

State	Open Account SOL	Written Contract SOL
Alabama	6 years	6 years
Alaska	3 years	3 years
Arizona	3 years	6 years
Arkansas	3 years	5 years
California	2 years	4 years
Colorado	3 years	6 years
Connecticut	3 years	6 years
Delaware	3 years	3 years
Florida	4 years	5 years
Georgia	4 years	6 years
Hawaii	6 years	6 years
Idaho	4 years	5 years
Illinois	5 years	10 years
Indiana	6 years	10 years
Iowa	5 years	10 years
Kansas	3 years	5 years
Kentucky	5 years	10 years
Louisiana	3 years	3 years
Maine	6 years	6 years
Maryland	3 years	3 years
Massachusetts	3 years	6 years
Michigan	6 years	6 years
Minnesota	6 years	6 years
Mississippi	3 years	3 years
Missouri	5 years	10 years
Montana	5 years	8 years
Nebraska	4 years	5 years
Nevada	4 years	6 years
New Hampshire	3 years	3 years
New Jersey	6 years	6 years
New Mexico	4 years	6 years
New York	3 years	6 years
North Carolina	3 years	3 years
North Dakota	6 years	6 years
Ohio	6 years	8 years
Oklahoma	3 years	5 years
Oregon	6 years	6 years
Pennsylvania	4 years	4 years
Rhode Island	3 years	10 years
South Carolina	3 years	3 years
South Dakota	6 years	6 years
Tennessee	6 years	6 years
Texas	4 years	4 years
Utah	4 years	6 years
Vermont	6 years	6 years
Virginia	3 years	5 years
Washington	3 years	6 years
West Virginia	2 years	10 years
Wisconsin	6 years	6 years
Wyoming	8 years	10 years

Note: SOL rules are complex and subject to change by legislation. This table reflects general statutes as of 2026. Consult a consumer attorney in your state for specific advice on your situation.

3. What starts and resets the clock?

When the clock starts: The SOL typically starts from the date of last activity on the account — most commonly the date of your last payment, or the date the debt became delinquent (usually 30–180 days after the bill was due). This varies by state.

What resets the clock:

Making any payment — even $1 — toward the debt
Making a written promise to pay the debt
Acknowledging the debt in writing (in many states)
Entering a new payment arrangement

What does NOT reset the clock:

Receiving a collection letter or phone call
Verbally acknowledging the debt (in most states)
The debt being sold to a new collector
The collector updating the account in their system

Collectors contacting you about an old bill? Upload the original bill to BillKarma — we’ll check whether the underlying charges were accurate before you decide to pay, dispute, or assert the SOL. Even $1 paid on a time-barred debt can restart the clock.

4. The 2025 CFPB medical debt credit report rule

In January 2025, the Consumer Financial Protection Bureau (CFPB) finalized a rule with major consequences for medical debt:

Medical debt removed from credit reports: The three major credit bureaus (Experian, Equifax, TransUnion) must remove all medical debt tradelines from consumer credit reports
No new medical debt reporting: Creditors and collectors cannot add new medical debt collections to credit reports
Credit score impact eliminated: Since medical debt no longer appears on reports, it cannot affect your credit score

What the rule does not do:

It does not cancel the underlying debt — you still legally owe the money within the SOL
It does not prevent collectors from calling you or sending letters
It does not prevent collectors from suing you within the SOL
It does not apply to other types of debt (credit cards, auto loans, etc.)

The practical effect: medical debt can no longer be used to deny you a credit card, mortgage, or auto loan. But it can still result in a lawsuit, wage garnishment, or bank account levy if a collector sues and wins before the SOL expires.

5. Zombie debt: what to watch for

Zombie debt is past-the-SOL debt that collectors purchase for pennies on the dollar and attempt to collect — hoping you’ll pay without realizing you’re no longer legally obligated to do so, or that you’ll inadvertently reset the SOL with a payment.

Signs you may be dealing with zombie debt:

You don’t recognize the collector or original creditor
The debt is vague — no specific dates, amounts, or provider information
The letter uses aggressive language or threats of lawsuit without specifics
The debt seems very old (more than 3–6 years)
The amount doesn’t match any bill you remember

Here is an example of a zombie debt collection notice with the red flags an informed consumer should catch:

NOTICE OF DEBT — ACME COLLECTIONS LLC — Account #: 7724918

Original creditor: “City Medical Group” ⚠ Third-party debt buyer — not the original provider. Verify the original creditor name.

Date of service: Not specified ❌ No date of service listed — cannot verify SOL without it. Request debt validation immediately.

Amount: $1,847.00 ❌ No itemization of charges — does not match any known bill. May be inflated with collector fees. $1,847.00

Threat: “Legal action may be taken if payment is not received within 10 days” ⚠ Pressure tactic — collectors often threaten suit on time-barred debt. Check the SOL before paying anything.

DO NOT PAY BEFORE VALIDATING THIS DEBT

What to do with a zombie debt collection letter:

Do not pay anything — even a token amount can reset the SOL
Send a debt validation letter via certified mail within 30 days (required under the Fair Debt Collection Practices Act)
Once validated, compare the debt date to your state’s SOL
If time-barred, send a cease-and-desist letter if you wish to stop contact
If the collector sues anyway, respond to the lawsuit citing the SOL defense

6. What to do if you’re sued for old medical debt

Receiving a lawsuit summons is frightening, but it’s not the end. Here are your critical steps:

Do not ignore the summons. If you don’t respond, the court will grant a default judgment in the collector’s favor — even on time-barred debt. A default judgment can lead to wage garnishment and bank account levies.
Check the debt date. When was the last payment or last activity? Compare to your state’s SOL.
File a written response to the lawsuit (called an “Answer”). Include the SOL expiration as an “affirmative defense” in your response.
Consult a consumer attorney. Many consumer attorneys handle FDCPA violations on contingency — free to you if the collector violated the law. The CFPB’s website has a lawyer referral tool.
Consider negotiating a settlement. Even if the SOL has expired, a settlement for less than the full balance is sometimes preferable to litigation costs. Only settle in writing, with a clear agreement that the debt is resolved.

7. Your options when facing medical debt

Situation	Best Option	Notes
Bill is recent (under 90 days old)	Dispute errors, apply for charity care, negotiate payment plan	Errors are most correctable early; charity care programs are still accessible
Bill is 90 days–1 year old	Negotiate lump-sum settlement (40–60 cents on dollar is common)	Providers will negotiate more aggressively before sending to collections
Bill is in collections (1–3 years)	Dispute validity, negotiate settlement, check SOL	Debt buyers purchase for 2–5 cents on dollar; 25–50% settlements are achievable
Bill is approaching or past SOL	Do not pay; send validation request; assert SOL defense if sued	Do NOT reset the clock with a payment
Overwhelming debt, multiple accounts	Consult a consumer attorney or bankruptcy attorney	Chapter 7 bankruptcy discharges most medical debt

Facing a large medical debt? Use our free calculator to look up what Medicare actually pays for the services on your bill — if the original charges were inflated, that’s leverage for negotiation even after the bill goes to collections.

8. Case studies

Time-barred debt lawsuit dismissed: $4,800 saved

A patient in California received a lawsuit summons for a $4,800 medical debt from a 2019 hospitalization. California’s SOL for open accounts is 2 years. The last payment on the account was in 2020, making the debt time-barred as of 2022. The patient filed a written Answer citing the expired SOL. The collector did not contest it, and the case was dismissed. Outcome: $0 paid on a $4,800 debt.

Zombie debt validation reveals debt already paid: $1,200 saved

A patient in Texas received a letter from a debt collector for $1,200 in hospital services from 2021. He did not recognize the collector. He sent a debt validation letter by certified mail within 30 days. The collector’s validation showed an account number. Cross-referencing his own records, he found the original account had been paid in full by his insurer — the debt buyer had purchased erroneous account data. The collector withdrew the claim. Outcome: $0 paid; potential credit harassment avoided.

Settlement on $9,000 collections debt: 35 cents on the dollar

A patient in Florida had a $9,000 hospital bill from 2022 go to collections. The debt was within the SOL. Unable to pay the full amount, she contacted the collections agency and offered a lump-sum settlement. After two rounds of negotiation, the agency accepted $3,150 (35% of the balance) as payment in full. The agreement was put in writing before payment was sent. Recovery: $5,850 below the original balance.

Frequently asked questions

What is the statute of limitations on medical debt?

The SOL is the time period during which a creditor can sue you in court for unpaid medical debt. After it expires, the debt is time-barred — the collector loses the right to a court judgment. SOLs range from 2 to 10 years depending on your state and how the debt is classified (open account vs. written contract). Check the state table above for your state.

Does paying an old medical bill reset the statute of limitations?

Yes — in most states, any payment on an old debt resets the SOL clock from the date of that payment. Even $1. A written promise to pay can also reset it. This is why you should always verify the SOL before making any payment on old debt. Request debt validation first to confirm the debt is valid and check when the last activity date was.

Can a debt collector sue me after the statute of limitations expires?

Collectors can file a lawsuit — courts don’t automatically screen for expired debts. But if you file a written response to the lawsuit asserting the SOL as a defense, the case should be dismissed. The critical rule: never ignore a lawsuit summons, even for time-barred debt. A default judgment can be entered if you don’t respond, regardless of whether the SOL has passed.

How does the 2025 CFPB medical debt rule affect my credit?

The CFPB rule, finalized in January 2025, removes medical debt from all consumer credit reports. Medical debt collections can no longer appear on Experian, Equifax, or TransUnion reports and cannot affect your credit score. This means a medical debt cannot be used to deny you a loan or credit card. However, the underlying debt still exists — collectors can still contact you and sue within the SOL.

What is zombie debt and how do I handle it?

Zombie debt is old debt — often past the SOL — purchased by debt buyers who contact you hoping you’ll pay without realizing you’re not legally obligated to do so (or that a payment will reset the SOL). If you receive a collection letter for old, unfamiliar debt: don’t pay anything, send a debt validation letter by certified mail within 30 days, then check the debt date against your state’s SOL before taking any further action.