Ignore the panic for a second. Nothing happens instantly. You aren’t going to jail, and your credit score doesn’t tank the moment you toss that invoice on the “deal with it later” pile. But if you ignore it long enough, the machinery of debt collection will start turning, and it can get ugly.
Initially, you just get annoying letters. Maybe a phone call. The hospital or doctor’s office usually keeps the debt in-house for about 90 to 180 days. They want their money, but they generally prefer working with you over selling your debt for pennies on the dollar to a collection agency. That period is your safety zone.
The Short Answer
- First 3-6 months: Just billing reminders. No credit damage yet.
- The 1-Year Rule: Even if sent to collections, medical debt cannot appear on your credit report for 365 days from the date of the first missed payment.
- Under $500: As of 2023, unpaid medical collections under $500 never hit your credit report.
- Legal Action: Rare for small amounts, but possible for large debts (wage garnishment is the worst-case scenario).
Phase 1: The Internal Billing Cycle (Days 1–90)
So, you missed the first bill. What now? Usually, nothing major. You get a “past due” stamp on the next envelope. Hospitals know the insurance system is a disaster—claims get denied, re-coded, and appealed all the time. They expect delays.
During this phase, you are dealing directly with the provider. This is actually the best time to act. I’ve called billing departments months after a procedure and asked for an itemized bill, only to find they charged me for Tylenol I never took. If you spot an error or just say, “I can’t pay this all at once,” they will almost always set up an interest-free payment plan. They just want cash flow.
Phase 2: Collections and the “Nuisance” Stage
Does the phone start ringing off the hook? Eventually, yes. If you ghost them for roughly 90 to 180 days, the provider writes the debt off as a loss and sells it to a third-party debt collector.
This is when the vibe changes. The nice hospital admin is gone; now you have a collector whose only job is to annoy you into paying.
- The Letters: They turn red or bold.
- The Calls: They start coming at dinner time.
However—and this is a huge tangible change in the law—collections agencies cannot instantly report this to credit bureaus. They have to wait one full year (365 days) from the original delinquency date. This “cooling-off period” gives you time to sort out insurance messes or pay it off.
Phase 3: The Credit Score Impact
Will this tank my ability to buy a house or car? It depends on the amount.
Recent changes by the big three credit bureaus (Equifax, Experian, TransUnion) have totally shifted the landscape:
- Debts under $500: These are invisible. If you owe $450 for an X-ray and never pay it, it won’t show up on your credit report. Period.
- Paid Debts: The moment you pay off a medical collection debt, it is deleted from your report. It doesn’t stick around for seven years like a missed credit card payment does.
But here is the trap: If the debt is over $500 and remains unpaid after that one-year grace period, it hits your report. It can drop your score by 50 to 100 points instantly.
Can They Actually Sue Me?
Is it worth their time to take me to court? Ideally, no. Lawyers are expensive. Suing you for $600 costs them more than the debt is worth.
But if you owe a massive amount—say, $5,000 or $20,000 for a surgery—the calculus changes.
- The Judgment: If they sue and win (which they usually do if you don’t show up), they get a judgment.
- Wage Garnishment: This is the real danger. They can legally take a chunk of your paycheck before it even hits your bank account.
- Bank Levies: In some states, they can freeze your bank account and take what is owed.
I once saw a client ignore a $12,000 ER bill thinking it would “go away.” Two years later, his employer received a garnishment order. It’s embarrassing and financially crippling.
Step-by-Step: How to Stop the Bleeding
If you have a bill sitting on your counter right now, don’t just stare at it. Do this:
- Don’t Pay a Cent Yet: First, request an itemized bill and the EOB (Explanation of Benefits) from your insurer. Compare them. Double-billing happens constantly.
- Check for “Charity Care”: Nonprofit hospitals are legally required to offer financial assistance. If you earn below a certain amount (often 200-400% of the poverty line), the bill might be forgiven entirely. I’ve seen $30,000 wiped out just by filling out a three-page form.
- Offer a Settlement: If the debt is in collections, they bought it cheap. If you owe $1,000, offer them $400 cash today to delete it. They often say yes.
- Get it in Writing: Never pay a collector until they send you a letter or email stating that the payment satisfies the debt in full.
Next Steps
Go find that bill. Look at the date. If it’s less than a year old, you have massive leverage to negotiate or apply for financial aid before it ever touches your credit score. Call the billing department today—not to pay, but to ask: “What is your financial assistance policy?”