What Happens If You Don’t Pay Medical Bills? (2026)

Q: Can my wages be garnished for medical debt?

In most states, yes. If a hospital or collection agency sues you and wins a court judgment, they can garnish your wages. Federal law limits wage garnishment to 25% of disposable earnings. However, four states — Texas, Pennsylvania, North Carolina, and South Carolina — prohibit or severely restrict wage garnishment for medical debt. Other states have their own caps that may be lower than the federal limit.

You open a medical bill for $4,200 and set it aside, hoping it will somehow resolve itself. It won’t. Ignoring medical bills triggers a predictable chain of events — internal collections, third-party debt collectors, credit report damage, potential lawsuits, and in some states, wage garnishment. But here’s what most people don’t know: you have more options and protections than you think, especially under new rules that took effect in 2023–2025. This guide walks through exactly what happens, month by month, when you don’t pay a medical bill — and what to do instead.

1. The medical bill payment timeline

When you don’t pay a medical bill, the consequences don’t happen overnight. There is a predictable timeline, and understanding it gives you leverage to intervene at any stage. Here’s what happens month by month:

Time After Service	What Happens	What You Should Do
30 days	First bill arrives. This is your initial statement, usually showing insurance adjustments and your patient responsibility.	Review for errors. Request an itemized bill. Upload your bill to BillKarma to check for overcharges.
60 days	Second notice arrives, often marked “Past Due.” Late fees may be added (typically $15–$50). The provider’s billing department begins outbound collection calls.	Call the billing department. Ask about payment plans, hardship discounts, or charity care programs.
90 days	Final notice before collections. The letter may warn that your account will be “referred to a collection agency” if not resolved. Internal collection efforts intensify.	This is your last window to negotiate directly with the provider. Apply for financial assistance now.
120 days	Account may be transferred to the hospital’s internal collection department or a third-party collection agency. You begin receiving calls and letters from the collector.	Know your rights under the Fair Debt Collection Practices Act. Request debt validation in writing within 30 days of first contact.
180 days	Most providers have now sold or assigned the debt to a third-party collection agency. The original provider may no longer negotiate directly.	Negotiate with the collection agency. Many will accept 30–60 cents on the dollar. Get any agreement in writing before paying.
1 year	If unpaid and over $500, the debt can now appear on your credit report (under 2023 credit bureau rules, medical debt cannot be reported until it has been in collections for at least one year).	Check your credit reports at annualcreditreport.com. Dispute any medical debt that was reported before the one-year waiting period.
3+ years	The creditor or collection agency may file a lawsuit, depending on the debt amount and your state’s statute of limitations (3–10 years). If they win a judgment, they can pursue wage garnishment or bank levies in most states.	Check your state’s statute of limitations. If the debt is near expiration, do not make partial payments or acknowledge it in writing — this can restart the clock.

The 90-day window is critical. You have the most negotiating power in the first 90 days, before the debt leaves the provider’s hands. After it goes to a third-party collector, you lose the ability to apply for the hospital’s financial assistance program and the provider has less incentive to negotiate. Act early.

2. When bills go to collections

The 90–180 day window is when most medical bills transition from the provider’s billing department to a collection agency. Here’s what you need to know about that process:

How the handoff works

Hospitals and medical practices handle collections in two ways. Some use an internal collection department that operates under the provider’s name — you may not even realize you’re speaking with a collector. Others hire or sell the debt to a third-party collection agency, which contacts you separately. The third-party agency typically pays 4–15 cents on the dollar for medical debt, which means they have significant room to negotiate.

Your rights when contacted by a collector

Debt validation: Within 30 days of a collector’s first contact, you can send a written request demanding they verify the debt. They must provide the original creditor name, the amount owed, and proof that you owe it. Until they validate, they cannot continue collection activity.
Cease communication: You can send a written request telling the collector to stop contacting you. They must comply, though this does not erase the debt.
No harassment: Under the Fair Debt Collection Practices Act (FDCPA), collectors cannot call before 8 a.m. or after 9 p.m., use threats or obscene language, call your workplace if you ask them to stop, or misrepresent the amount owed.
No false threats: A collector cannot threaten to sue you unless they genuinely intend to. They cannot threaten wage garnishment without a court judgment.

Don’t ignore collection letters. The first letter from a collector starts a 30-day clock for you to request debt validation. If you miss that window, you lose an important legal protection. For more on your rights, see our guide to medical bill collection rights.

3. Impact on your credit score (2023–2025 rules)

Medical debt credit reporting changed dramatically between 2023 and 2025. The old rules were harsh — a single unpaid medical bill could drop your credit score by 100+ points within months. The new rules are significantly more protective:

Rule	Before 2023	Current (2023–2025)
Reporting delay	Medical debt could appear on your credit report after 180 days in collections	Medical debt cannot appear until it has been in collections for at least one year
Paid medical collections	Paid medical collections remained on your report for up to 7 years	Paid medical collections are removed entirely from credit reports
Small balances	Medical debt of any amount could be reported	Medical debt under $500 is no longer reported
Credit score impact	Medical collections weighted similarly to other collections	FICO 9 and VantageScore 4.0 give medical debt less weight than other types of collections

These changes, implemented by Equifax, Experian, and TransUnion in coordination with the Consumer Financial Protection Bureau (CFPB), removed an estimated 70% of medical collections from consumer credit reports. The CFPB also proposed a rule in 2024 to ban medical debt from credit reports entirely, though that rule’s implementation status depends on regulatory proceedings.

What this means in practice

If your medical debt is under $500, it will not appear on your credit report at all. If it’s over $500 and you pay it before it has been in collections for one year, it will never be reported. If it has already been reported and you pay it, the credit bureaus will remove it. This gives you a meaningful window to resolve medical debt without credit damage.

Check your credit report for old medical debt. If you have medical collections under $500 or paid medical collections still showing on your report, dispute them with the credit bureaus. Under the current rules, they should be removed. For a step-by-step walkthrough, see our guide to medical debt and your credit report.

4. Can you be sued for medical debt?

Yes. Hospitals, medical providers, and collection agencies can file lawsuits to collect unpaid medical bills. But most don’t sue for small amounts, and your risk depends heavily on your state, the debt amount, and the provider’s policies.

Who sues and how often

A 2023 study by the Kaiser Family Foundation found that about 1 in 5 hospitals regularly sue patients for unpaid bills. Large nonprofit hospital systems are the most frequent filers, despite being required by IRS rules to offer financial assistance. Some hospital systems file thousands of lawsuits per year, while others have policies against suing patients below certain income thresholds.

State-by-state thresholds and protections

State	Notable Protections
Maryland	Hospitals must screen patients for financial assistance before suing. No lawsuits allowed against patients earning under 200% of the federal poverty level.
Colorado	Hospitals cannot sue, garnish wages, or report to credit bureaus for patients who qualify for financial assistance or earn under 250% FPL.
Washington	Nonprofit hospitals must offer charity care to patients under 300% FPL. Restrictions on lawsuits and liens against low-income patients.
New Mexico	Limits on interest rates on medical debt (4%). Requires 120-day notice before filing suit.
California	Nonprofit hospitals must offer charity care to patients under 400% FPL. Limits on billing insured patients more than in-network cost-sharing.
Minnesota	Hospital liens on primary residences are prohibited. Income-based financial assistance required.

What happens if you’re sued

If a hospital or collection agency files a lawsuit, you will be served with a summons and complaint. Do not ignore it. If you don’t respond, the court will enter a default judgment against you, which gives the creditor the legal right to garnish your wages, levy your bank accounts, and in some states, place a lien on your property. If you respond, you can raise defenses — including that the bill was incorrect, that you were not offered financial assistance, or that the statute of limitations has expired.

Example: What a medical debt lawsuit costs you — $6,800 emergency room bill

Original ER bill (CPT 99285 — Level 5 emergency visit + imaging) $6,800.00

Collection agency fees and interest (18 months in collections) ⚠ Typical markup by collection agencies $1,360.00

Attorney fees and court costs (added to judgment) ⚠ Many states allow creditors to add legal costs $1,800.00

Post-judgment interest (varies by state, typically 5–12% annually) $680.00

TOTAL WITH JUDGMENT $10,640.00

A $6,800 bill can balloon to over $10,000 after collection fees, attorney costs, and interest. By contrast, most hospitals will accept a 40–60% reduction if you negotiate before the bill goes to collections, and many will offer 0% interest payment plans. The cost of ignoring a medical bill is almost always higher than the cost of addressing it early.

5. Wage garnishment for medical debt

Wage garnishment is the most severe financial consequence of ignoring medical bills. It happens when a creditor wins a court judgment and obtains a court order directing your employer to withhold a portion of your paycheck.

How it works

A creditor cannot garnish your wages without first suing you and winning a judgment. After the judgment, they must file a separate garnishment action with the court. Your employer receives the garnishment order and is legally required to withhold the specified amount from each paycheck and send it to the creditor. Federal law caps garnishment at 25% of your disposable earnings (after taxes and mandatory deductions) or the amount by which your weekly earnings exceed 30 times the federal minimum wage ($217.50 per week) — whichever is less.

States that restrict wage garnishment for medical debt

Texas — Prohibits wage garnishment for most consumer debts, including medical debt. Creditors can still pursue bank levies.
Pennsylvania — Wage garnishment is not allowed for medical debt or most consumer debts. Only student loans, taxes, and child support can be garnished.
North Carolina — Prohibits wage garnishment for consumer debts including medical bills.
South Carolina — Prohibits wage garnishment for consumer debts including medical bills.

Other states have lower garnishment caps than the federal 25% limit. For example, Massachusetts limits garnishment to 15% of gross wages, and New York protects the first $469.50 per week (as of 2025) from any garnishment. For a full breakdown, see our guide to medical debt wage garnishment by state.

Garnishment is preventable. Wage garnishment only happens after a lawsuit and court judgment. If you are served with a lawsuit, respond to it — even if you owe the money. Showing up in court allows you to negotiate a payment plan, raise defenses, and potentially get the amount reduced. Default judgments (when you don’t respond) are the number one cause of medical debt wage garnishment.

6. What hospitals CANNOT do

Even if you owe thousands in unpaid medical bills, hospitals face significant legal restrictions on how they can collect and what they can deny you.

EMTALA: emergency care cannot be refused

The Emergency Medical Treatment and Labor Act (EMTALA) is a federal law that requires every hospital with an emergency department that accepts Medicare to:

Provide a medical screening examination to anyone who arrives at the emergency department, regardless of ability to pay or outstanding debt
Stabilize any emergency medical condition before discussing payment, insurance, or prior balances
Not transfer a patient to another facility solely because they cannot pay (transfers are only permitted if medically appropriate and the receiving facility agrees)

EMTALA violations carry fines of up to $119,942 per incident (2025 amount, adjusted annually for inflation). Hospitals that develop a pattern of EMTALA violations can be excluded from Medicare entirely, which would be financially devastating for any hospital.

Nonprofit hospital obligations

Approximately 57% of U.S. hospitals are nonprofit and receive tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. In exchange, the IRS requires nonprofit hospitals to:

Establish a written financial assistance policy (charity care policy)
Publicize the policy and make it available to patients
Not engage in “extraordinary collection actions” (lawsuits, wage garnishment, liens, credit reporting) until they have made reasonable efforts to determine whether the patient qualifies for financial assistance
Limit charges to financially assisted patients to no more than the amounts generally billed to insured patients

What hospitals cannot legally do

Refuse emergency treatment based on outstanding debt or inability to pay
Require payment before providing emergency screening and stabilization
Threaten to withhold emergency care as a collection tactic
Take extraordinary collection actions without first offering financial assistance (nonprofit hospitals)
Charge uninsured patients more than the gross charges on the chargemaster without providing the option to apply for financial assistance

If you’ve been denied care or financial assistance: File a complaint with the Centers for Medicare & Medicaid Services (CMS) for EMTALA violations, or with the IRS for nonprofit hospitals that fail to offer financial assistance. Look up your hospital’s financial assistance policy in our hospital directory.

7. Better alternatives than ignoring bills

Ignoring a medical bill is the most expensive option. Every alternative — from a phone call to a formal application — has a better outcome than silence. Here are the most effective strategies, starting with the easiest:

a) Request an itemized bill and check for errors

Medical billing errors affect an estimated 49–80% of hospital bills, depending on the study. Before paying anything, request a full itemized statement with CPT codes, quantities, and line-by-line charges. Upload your bill to BillKarma to automatically flag duplicate charges, upcoding, unbundling, and charges that exceed the Medicare benchmark.

b) Negotiate the bill directly

Call the billing department and ask for a reduction. Hospitals expect negotiation — their chargemaster prices are set 3–10x above what they actually expect to collect. Use the BillKarma calculator to look up Medicare rates for each CPT code on your bill, then ask the hospital to match a rate closer to what Medicare or their insured patients pay. Most hospitals will offer 20–50% off for patients who ask.

c) Apply for financial assistance or charity care

Every nonprofit hospital is required to have a financial assistance program. Eligibility varies, but many programs cover patients earning up to 200–400% of the federal poverty level ($62,400–$124,800 for a family of four in 2025). Financial assistance can reduce your bill by 50–100%. See our guide to hospital financial assistance and charity care for eligibility criteria and application steps.

d) Write a hardship letter

If your income has dropped, you’re facing job loss, or the medical bill represents a significant portion of your annual income, a hardship letter can persuade the billing department to reduce or eliminate the bill. Include documentation of your financial situation, and reference the hospital’s financial assistance policy. For templates and step-by-step instructions, see our hardship letter guide.

e) Set up a payment plan

Most hospitals offer 0% interest payment plans for balances under $10,000–$25,000. Payment plans prevent the bill from going to collections, protect your credit, and give you time to apply for financial assistance or negotiate a reduction. Ask for the longest term available — many hospitals will accept $50–$100 per month even on large balances.

f) If the bill is already in collections

You still have options. Request debt validation. Negotiate a settlement (collection agencies routinely accept 30–60% of the original amount). Get any settlement agreement in writing before making a payment. Confirm that the collector will report the debt as “paid in full” or request a “pay for delete” agreement. If you can’t afford the bill, read our guide on what to do when you can’t afford a medical bill.

Case study: $14,200 ER bill reduced to $0 through charity care

A 34-year-old self-employed graphic designer in Ohio went to the emergency room for severe abdominal pain that turned out to be appendicitis. The ER visit and emergency surgery generated a $14,200 bill. She earned $38,000 per year and had no health insurance. She ignored the first two bills out of panic.

At the 75-day mark, she called the hospital’s billing department and asked about financial assistance. The hospital was a nonprofit system with a charity care policy covering patients under 300% of the federal poverty level ($46,800 for a single person in 2025). Her income qualified. She submitted a one-page application with her tax return and two pay stubs. Three weeks later, the hospital notified her that the entire $14,200 balance was forgiven under their charity care program. Total paid: $0.

Case study: $3,400 bill negotiated to $1,020 using Medicare rate comparison

A 52-year-old teacher in Georgia received a $3,400 bill for an outpatient orthopedic consultation and knee X-rays at a hospital-owned clinic. The bill included a $1,800 facility fee (CPT 99214) and $1,600 for bilateral knee X-rays (CPT 73562). She used the BillKarma calculator and found that the Medicare rate for the same services totaled approximately $340.

She called the billing department, cited the Medicare rates, and asked for a “fair cash rate.” The hospital offered a 50% reduction to $1,700. She countered at $1,020 (3x the Medicare rate), citing the hospital’s own financial assistance policy, which stated that uninsured patients should not be charged more than the amount generally billed to insured patients. The hospital accepted. Savings: $2,380 (70% reduction).

The bottom line: Doing nothing is the worst financial decision you can make with a medical bill. Even a single phone call to the billing department can result in a 20–50% reduction. Applying for financial assistance can eliminate the bill entirely. The system is designed to reward patients who engage and penalize those who don’t. Start by uploading your bill to see what you actually owe.

Frequently asked questions

How long before an unpaid medical bill goes to collections?

Most hospitals and medical providers send unpaid bills to collections after 90 to 180 days of non-payment. The exact timeline varies by provider. Some hospital systems use internal collection departments first and only send accounts to third-party collection agencies after 120–180 days. Once a bill reaches a third-party collector, it can appear on your credit report after the collector reports it to the credit bureaus.

Can medical debt affect my credit score?

Yes, but recent rule changes have reduced the impact. As of 2023, the three major credit bureaus no longer report medical debt under $500. Paid medical collections are removed from credit reports entirely. Unpaid medical debt over $500 cannot appear on your credit report until it has been in collections for at least one year. These changes removed an estimated 70% of medical collections from consumer credit reports.

Can a hospital sue me for unpaid medical bills?

Yes, hospitals and collection agencies can sue you for unpaid medical bills. However, most hospitals do not sue for small balances. Lawsuits are more common for debts exceeding $1,000–$5,000. Some states have passed laws restricting hospital lawsuits against low-income patients, and nonprofit hospitals are required to offer financial assistance before pursuing extraordinary collection actions.

Can my wages be garnished for medical debt?

In most states, yes — but only after a creditor sues you and wins a court judgment. Federal law limits garnishment to 25% of disposable earnings. Four states — Texas, Pennsylvania, North Carolina, and South Carolina — prohibit or severely restrict wage garnishment for medical debt. See our wage garnishment guide for your state’s rules.

Can a hospital refuse to treat me if I owe them money?

A hospital cannot refuse emergency treatment regardless of your ability to pay or any outstanding balance. This is guaranteed by EMTALA, a federal law that applies to all hospitals with emergency departments that accept Medicare. However, hospitals can refuse non-emergency, elective care if you have unpaid bills and may require payment plans or deposits before scheduling elective procedures.

What is the statute of limitations on medical debt?

The statute of limitations on medical debt varies by state, ranging from 3 to 10 years. After it expires, a creditor can no longer sue you. However, the debt does not disappear — collectors can still contact you. Be cautious: making a partial payment or acknowledging the debt in writing can restart the statute of limitations in some states.