Medical debt and credit reports in California

California law bans medical debt from credit reports.

No one may report a medical debt to a credit bureau. If someone knowingly does, the debt becomes void and cannot be collected.

Checked against official sources: October 30, 2026.

The rule in California

Full ban

No one may report a medical debt to a credit bureau. If someone knowingly does, the debt becomes void and cannot be collected. Written medical debt contracts signed on or after July 1, 2025 must include a notice about this rule. Lenders also may not use a medical debt on a credit report against you in a credit decision.

Who the rule covers: Anyone who holds or collects the medical debt (it is illegal for any person to send medical debt information to a credit bureau)

In effect since: January 1, 2025

It covers both paid and unpaid debt.

Law: Cal. Civ. Code 1785.27, 1785.20.6, 1785.3

State bans and federal law

In January 2025 the CFPB issued a rule to keep most medical debt off credit reports. On July 11, 2025 a federal court in Texas vacated (cancelled) that rule at the joint request of the CFPB and the plaintiffs. The rule is not in effect.
On October 28, 2025 the CFPB published its view that the federal Fair Credit Reporting Act generally overrides (preempts) state laws that keep categories of information such as medical debt off credit reports. The CFPB also said its guidance is not binding and that courts decide these questions.
On August 10, 2026 a federal court in Texas declared that a Texas law barring credit bureaus from reporting certain out-of-network medical debt is preempted by the Fair Credit Reporting Act, and barred the state from enforcing it. That ruling is about the Texas law; laws in other states are decided case by case.

Law: Cornerstone Credit Union League v. CFPB, No. 4:25-cv-16 (E.D. Tex. July 11, 2025); CFPB; CFPB interpretive rule, Fair Credit Reporting Act; Preemption of State Laws, 90 FR 48710 (Oct. 28, 2025); Consumer Data Industry Ass'n v. Texas, No. 1:19-CV-876-RP (W.D. Tex. Aug. 10, 2026)

Other limits on collection in California

Waiting rules

Wait before a lawsuit: 180 days after the first bill

A hospital, collection agency or debt buyer may not sue you over a hospital bill until 180 days after the first bill. This waiting period is extended while you have an insurance or Medi-Cal or Medicare appeal pending, if you keep the hospital informed. Before a hospital sends a bill to collections or sells it, it must send you a notice with the dates of service, who gets the bill, how to get an itemized bill, your insurance on file, and a financial assistance application.

Liens on your home

For patients who qualify under the hospital's charity care or discount policy, the hospital and its affiliates may not use liens on real property, and outside collectors and debt buyers may not use liens on real property or sell your home, to collect a hospital bill.

Wage garnishment

For patients who qualify, the hospital may not garnish wages. An outside collector or debt buyer may garnish wages only with a court order after a motion showing you can afford it. For other debts, at most the lesser of 20% of weekly disposable earnings or 40% of the amount above 48 times the minimum hourly wage can be taken.

Selling the debt

A hospital may sell patient debt to a debt buyer only if it found you ineligible for financial assistance or you did not respond for 180 days, and the buyer is licensed, agrees not to resell it and not to charge interest or fees, and agrees to return the account if it turns out to be covered by insurance or eligible for charity care.

Lawsuit rules

A debt collector suing on a hospital debt must state in the complaint that the debt came from a hospital, the hospital's financial-assistance notice dates, and the balance with any interest and fees added, and must attach the financial assistance application and notice the hospital sent. A default judgment cannot be entered without sworn business records showing these facts.

Law: Cal. Health & Safety Code 127425, 127426; Cal. Civ. Code 1788.14(e), 1788.185; Cal. Code Civ. Proc. 706.050

Is my debt too old in California?

Kind of agreement	Time limit to sue
Written contract	4 years
Open account	4 years
Oral (spoken) agreement	2 years

A lawsuit on a written contract, a book account or an account stated must be filed within 4 years. On an oral contract, within 2 years. Once the 4-year period has run, no one may sue or start arbitration to collect the debt.

What can restart the clock

A new promise to pay restarts or extends the time only if it is in writing and signed by you.

Law: Cal. Code Civ. Proc. 337, 339, 360

A time limit to sue can differ by kind of agreement, and when it starts and what restarts it can differ; a court decides.

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Where to complain in California

Hospital bills and financial assistance: Department of Health Care Access and Information (HCAI), Hospital Bill Complaint Program
A hospital wrongly denied you charity care or a discount, did not give the required notices, or did not follow the rules before sending your bill to collections. It does not handle general billing or price disputes.
Health plan problems: Department of Managed Health Care (DMHC) Help Center
Problems with an HMO or other plan licensed by DMHC, including surprise bills and denials.
Health insurance: California Department of Insurance · 1-800-927-4357
Problems with a health insurance policy regulated by the Department of Insurance.
Debt collectors: Department of Financial Protection and Innovation (DFPI) · 1-866-275-2677
A debt collector or debt buyer broke state collection rules.
Attorney general: California Attorney General, Public Inquiry Unit
Other consumer complaints against a business.

Questions about medical bills in California

Can medical debt be reported to credit bureaus in California?

California law bans medical debt from credit reports. No one may report a medical debt to a credit bureau. If someone knowingly does, the debt becomes void and cannot be collected.

How long can a medical bill be collected or sued on in California?

A lawsuit on a written contract, a book account or an account stated must be filed within 4 years. On an oral contract, within 2 years.

Nearby states

National rules that apply in every state

Nonprofit hospitals (federal rules)

Each nonprofit hospital must have a written financial assistance policy (FAP).

Law: 26 U.S.C. 501(r)(4); 26 CFR 1.501(r)-4

Before any ECA, the hospital must tell you about financial assistance and wait at least 120 days from the first bill sent after you left the hospital.

Law: 26 CFR 1.501(r)-6(c)(3)

You can apply for at least 240 days from the first bill sent after you left the hospital.

Law: 26 CFR 1.501(r)-1(b)(3)

If you apply during the application period, even with an incomplete application, the hospital and its collectors must stop starting or continuing ECAs until the hospital decides, or until you fail to send requested information within a reasonable time.

Law: 26 CFR 1.501(r)-6(c)(8)

Once you are found eligible, the hospital cannot charge you more than the amounts generally billed (AGB) to people with insurance for emergency or other medically necessary care, and must charge less than its full gross charges for other covered care.

Law: 26 U.S.C. 501(r)(5); 26 CFR 1.501(r)-5

Surprise bills (No Surprises Act)

With most private health plans (job-based plans, Marketplace and other individual plans), you are protected from surprise out-of-network bills for emergency care, for non-emergency care at an in-network hospital, hospital outpatient department or ambulatory surgical center, and for air ambulance services.

Law: 42 U.S.C. 300gg-111, 300gg-131, 300gg-132, 300gg-135

For protected services, you can't be charged more than your in-network cost-sharing (copay, coinsurance, deductible).

Law: 42 U.S.C. 300gg-131, 300gg-132

Ground ambulance services are generally not covered by these federal protections, unless a state law has different rules.

Law: CMS, Know your rights when using insurance

If you don't have insurance or won't use it, providers and facilities must usually give you a written good faith estimate.

Law: 42 U.S.C. 300gg-136; 45 CFR 149.610

If one provider's or facility's bill is at least $400 more than its good faith estimate, you can use the federal patient-provider dispute resolution process.

Law: 45 CFR 149.620(a)(2)(ii), (c)(1)

Credit reports

A collection account generally cannot be reported for more than 7 years.

Law: 15 U.S.C. 1681c(a)(4), (c)(1)

For a veteran's medical debt (care authorized by the VA from a non-VA provider, or a bill the VA charged in error), nationwide credit bureaus may not report it until 1 year after the care, and may not report it once it is fully paid or settled, when they know it is a veteran's medical debt.

Law: 15 U.S.C. 1681c(a)(7), (8); 15 U.S.C. 1681a

If a medical debt on your credit report is wrong, you can dispute it with the credit bureau for free.

Law: 15 U.S.C. 1681i(a)(1)

Debt collectors

A debt collector must give you validation information about the debt, including the amount and how to dispute it.

Law: 12 CFR 1006.34

If you dispute the debt in writing within the validation period, the collector must stop collecting the disputed amount until it sends you verification of the debt.

Law: 12 CFR 1006.38(c), (d)(2)

A debt collector must not sue or threaten to sue you on a time-barred debt, meaning a debt whose statute of limitations has run out.

Law: 12 CFR 1006.26(b)

Itemized bills and price lists

Your medical and billing records kept by a health care provider are part of your 'designated record set'.

Law: 45 CFR 164.501 (designated record set); 45 CFR 164.524(b)(2)

If Medicare paid for an item or service, you can ask the provider in writing for an itemized statement.

Law: 42 U.S.C. 1395b-7(b)

Every hospital must post online a machine-readable file of all its standard charges, and a consumer-friendly list of at least 300 shoppable services (or an online price estimator tool).

Law: 45 CFR 180.40, 180.50, 180.60

Medicaid and Medicare

If you qualify for Medicaid, it can pay for covered care you got up to 3 months before the month you applied, if you were eligible then.

Law: 42 U.S.C. 1396a(a)(34), 1396d(a); Pub. L. 119-21, sec. 71112 (July 4, 2025)

If you are in the Qualified Medicare Beneficiary (QMB) program, Medicare providers may not bill you for Medicare deductibles, coinsurance or copays for Medicare-covered care.

Law: 42 U.S.C. 1396a(n)(3)(B); CMS

If your health plan denies a claim

You must file an internal appeal within 180 days (6 months) of the notice that your claim was denied.

Law: 45 CFR 147.136(b); HealthCare.gov

After a final denial, you can ask for an external review by an independent reviewer within 4 months.

Law: 45 CFR 147.136(c), (d); HealthCare.gov

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