The Medical Debt Relief Act refers to proposed federal legislation (such as H.R. 6003, H.R. 4827, or S. 2519) designed to prohibit consumer reporting agencies from including medical debt on credit reports and restrict lenders from using such data in credit decisions. These efforts aim to stop medical debt, often caused by unexpected illnesses, from harming patients' credit scores.
Introduced in House (10/19/2023) This bill prohibits consumer reporting agencies from including medical debt on a consumer report (i.e., credit report).
About the debt relief program
Public Health partnered with the non-profit organization Undue Medical Debt to implement the program. Residents started to receive letters to say their debt was canceled in May 2025 and, as of December 2, 2025, over $363 million of medical debt has been erased for over 171,000 residents.
It's partly true: medical debt * does fall off your credit report* after seven years from the first delinquency date, even if unpaid, and paid medical debt is removed sooner (under $500 debt is removed quickly). However, the debt itself doesn't vanish; the statute of limitations for being sued varies by state (3-10 years) and making a payment can restart it, meaning you could still owe the money and face collection efforts, just not via credit reports after seven years.
If you don't pay medical bills in 2025, they can still go to collections, damage your credit (though new rules aim to help), incur fees/interest, and potentially lead to lawsuits, liens, or wage garnishment, but you can often negotiate payment plans or seek financial assistance to resolve them, with options like California's new law (SB 1061) preventing some reporting.
By hospital or provider write-offs
Some providers write off uncollected bills after a certain period has passed, typically when they determine the patient cannot or will not pay. This is largely an accounting action, though, and the debt may still be assigned to collections.
5 Useful Tips to Help You Erase Medical Debt
1. After 7 Years, Debt Disappears from Your Credit Report—But Not Necessarily Your Life. The Fair Credit Reporting Act (FCRA) limits how long negative items—like charge-offs, collections, and late payments—can appear on your credit report.
Any medical bills can be discharged in bankruptcy under chapter 7. This includes healthcare bills charged to your credit cards. Additionally, this chapter can provide quick relief from any other debts you have.
The "777 rule" in debt collection, also known as the 7-in-7 rule, is a CFPB regulation (Regulation F) limiting calls: collectors can't call more than 7 times in 7 days for a specific debt, nor call within 7 days of a conversation about that debt. It aims to prevent harassment, applying to calls, texts, and emails, though exceptions exist, and the presumption of compliance can be rebutted by aggressive call patterns like rapid succession or highly concentrated calls.
No, a hospital cannot turn you away from the emergency room for owing money due to federal law (EMTALA), requiring stabilization for emergencies regardless of ability to pay; however, for non-emergency care, hospitals can refuse treatment, require deposits, or stop services for unpaid bills, especially for private hospitals, though nonprofit hospitals must follow specific financial assistance policies before extreme collections, notes Massachusetts Legal Help and NCLC Digital Library.
Debt forgiveness is when a lender or creditor agrees to wipe out all or part of a debt. You may be able to apply if you have unsecured debts, like credit cards, student loans or tax debt. Medical debts and mortgages may also qualify for some types of relief.
Can medical creditors take my home? In some cases, unpaid medical debt can result in a lien being placed on your home. However, certain protections exist, such as homestead exemptions, irrevocable trusts, and Medicaid estate planning strategies. Proper legal planning can help shield your home from medical creditors.
Ways to Negotiate Medical Debt
Medical debt can also lead people to avoid medical care, develop physical and mental health problems, and face adverse financial consequences like lawsuits, wage and bank account garnishment, home liens, and bankruptcy.
California's Law
Senate Bill 1061 (SB 1061), authored by Senator Monique Limón (D-Santa Barbara) and sponsored by Attorney General Bonta, went into effect on January 1, 2025, and protects consumers from having their credit ruined by medical debt appearing on credit reports.
Unpaid medical bills can lead to severe legal consequences, including actions from healthcare providers or debt collectors. Ignoring these actions may result in court orders and, in extreme cases, jail time due to contempt of court. Addressing unpaid medical bills promptly is essential to avoid such outcomes.
Unpaid medical bills don't just disappear; they can stay on your credit report for up to seven years and potentially lead to lawsuits, but recent changes mean paid collections under $500 are removed, and new rules aim to ban medical debt from credit reports entirely, though they face legal challenges. While debt collectors can't sue indefinitely (due to state statutes of limitations, usually 3-6 years), the debt itself often remains, and you can negotiate with providers or agencies for payment plans or settlements.
In a Nutshell
If you don't pay a debt, it can be sent to collections. If you continue not to pay, you'll hurt your credit score and you risk losing your property or having your wages or bank account garnished.