Editorial Policy

What to do when an old medical bill resurfaces

Erica Sandberg

January 14, 2016

QHi Erica,

I am getting totally confusing information about my situation. I had a dentist bill in 2010 when I was in college and living basically on nothing. I tried to pay, but I shorted the dentist $300 in the end. The weird thing is I never heard from him again — until now. This was not on my credit report before, but it is now. I honestly forgot all about this. My dad says to forget about it — that they can't do anything to me. What's the truth? It will stay on my report for seven years, right? What if I'm sued? — Jaden

ADear Jaden,

In other words, just how long can an old bill pain you like a bad toothache, and can it ever be extracted? Here's what you need to know about medical debt, time frames, collection agencies, and your rights and responsibilities:

When does a bill go into collections? Health-care providers are typically not in the business of offering loans and then taking monthly payments, with interest built in so they turn a profit. Instead, the dentist provided a medical service and expected to be paid for it, either via insurance or with cash. When the office did not receive full payment, they charged the debt off, which probably happened three to six months after trying to reach you. At that stage a collection agency might have bought the account for a fraction of its value, planning to collect on the full amount due, plus any fees.Ask Erica

How long can a collection agency ask for the money? The answer is until you either pay the debt, demand they stop, or discharge (or pay) in bankruptcy.

Now, for some reason the collection agency sat on the bill for many years. Maybe you moved around a lot and were impossible to track down, or the company had bigger balances to pursue. Whatever the case, the collection agency either kept the account or sold it to another collection agency, thus recouping some of its initial investment.

How long does a delinquent debt stay on your credit report? According to the Fair Credit Reporting Act, a bad bill may remain on a person's file for seven years. However, because the exact start date may be hard to pinpoint, the Federal Trade Commission stipulates that the credit reporting agency “may establish and follow reasonable procedures to ensure that the reported date of delinquency is a date before the account was referred to collection or charged off.”

In short, the collection debt will remain on your credit report for seven years from the original date of delinquency. After that, it will be purged from your files.

How many years until a creditor can no longer sue you for a bill? A creditor has only a certain number of years to take you to court for an unpaid debt. The statute of limitations depends on the state where you live. For example, in Maryland a creditor has three years to sue you for a written contract or open accounts; in Texas, a creditor has four years.

The statute of limitations kicks in when the account becomes delinquent — from when you first missed a payment, so know what the statute of limitations is for your state. It's not unheard of for a collector to sue for such a small amount — and going to court is an action you'll want to avoid.

If the collection agency can no longer sue you for the debt because the statute of limitations has run out, great. You may either pay what you owe (which you might consider your responsibility) or tell them to stop contacting you. The Debt Collectors Practices Act gives consumers the right to send a cease and desist letter, which will stop creditors from communicating with you, unless it's a notice to sue — and that won't be an issue if the statute of limitations has lapsed.

On the other hand, if the collection agency can take you to court, consider paying up. It's unlikely that it will sue because the debt is so small, but you owe only a few hundred dollars — an amount you probably can scrape together with minimal effort.

Got a question for Erica? Send her an email.