Do Medical Debts Ever Disappear?

It's a common question: do medical debts ever go away? The answer is yes, but it's not as simple as you might think. Medical debt may disappear from your credit report after seven years, but that doesn't mean you're problem-free. Companies can try to collect medical debt practically forever, and only three states have laws that settle certain debts once the statute of limitations has passed. Medical bills are more likely to affect your credit if they are not paid for many months and transferred to collections.

From now on, paid and unpaid debts for medical collections generally remain on your credit history for seven years after being reported. Some 23 million people, or nearly 1 in 10 adults, have significant medical debt, according to a recent report by the Kaiser Family Foundation. Beginning July 1, debts paid for medical collections will no longer be included in the consumer credit reports of the three credit bureaus. Last week, the three major credit bureaus announced significant changes in how medical debt will affect Americans' credit scores.

According to credit bureaus, about 70 percent of medical debt will be removed from Americans' credit reports once the aforementioned changes take effect. Unpaid medical debts are usually released to a collection agency after 60 to 120 days of delinquency. In addition, unpaid medical bills will not appear on credit reports unless they have been in collections for at least one year (compared to the current six months). Host a fundraiser with a crowdfunding site like GiveForward to get help with your bills from family, friends and strangers, although it's not a safe way to pay off your medical debt.

The offices made these decisions after a medical debt review revealed that, for most people, the debt was the result of a single or emergency event. The burden worsened during the COVID-19 pandemic, as unemployment numbers increased and the virus placed additional pressure on healthcare and consumer costs. When they do, there is a six-month waiting period before unpaid medical debt appears on their credit reports. Equifax, Experian and TransUnion are eliminating billions of dollars in medical debt from credit reports.

So while it's true that medical debts can go away after seven years, it's important to remember that companies can still try to collect them even after that time has passed. It's also important to note that unpaid medical bills can still appear on your credit report if they have been in collections for at least one year. Finally, if you're struggling with medical debt, there are ways to get help with your bills from family, friends and strangers.