Certain laws provide protections and rights to a person facing debt collection and being sued for medical bills. Chief among these laws is the U.S. Fair Debt Collection Practices Act. Other laws that come into play in the process of being sued for medical bills are the codes of civil procedure in each of the 50 states and the U.S. Bankruptcy Code.
Notification of Debt
The laws for collecting medical bills have an initial requirement that an individual is duly notified of the debt before any legal action starts. Most states require proof of an attempt to notify the consumer of the medical debt. In most cases, a certified letter is sent to the person who owes medical debt so that there is solid proof that the debtor was informed of the debt.
Verification of Debt
Upon receiving this notification, under the Fair Debt Collection Practices Act (as well as specific debt collection laws in each state) the consumer is able to request what is known as verification of the debt. Within 30 days, the medical service provider must deliver to the consumer written confirmation of the debt. Most state laws permit the consumer a 30-day period to pay the debt or to make arrangements for a payment plan after receipt of the verification.
Summons and Petition
If a consumer fails to pay the debt after verification by the medical creditor, a lawsuit is possible. By law the lawsuit is filed either in the jurisdiction in which the medical services occurred or where the debtor lives. Normally these types of lawsuits are filed in the local county or district court.
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The debtor must be served with a summons and petition to be subject to the jurisdiction of the court in regard to the lawsuit. Normally a sheriff's deputy serves these court documents on the debtor. The summons advises that the debtor has to respond to the lawsuit. The petition details the specific allegations associated with the medical debt.
Opportunity to be Heard
The laws on being sued for medical bills provide the debtor with the right to be heard prior to judgment. The debtor is entitled to a trial if she has a substantive reason to dispute the debt. (For example, the defendant in the case is not the person responsible for the debt.)
Once the debtor makes her case (again, normally at a trial), the court enters judgment. Should the court find in favor of the plaintiff seeking payment of medical bills, an order is entered requiring the debtor to pay the debt.
Collection on Judgment
The creditor can proceed to judicial collection against the debtor after the judgment is entered. The steps that a medical creditor takes in this regard include garnishing a debtor's paychecks and bank accounts.
A person who owes medical bills and who faces or is involved in a lawsuit by a creditor can file for bankruptcy protection. By filing a bankruptcy, the medical creditor must cease its collection efforts, including any pending lawsuit against the consumer.