Medical debt and credit reports in Minnesota

The rule in Minnesota

Full ban

No one collecting a medical debt may report it to a credit bureau, and a credit bureau may not include information it knows or should know is about medical debt in a credit report. This covers debt for medically necessary care, including medical credit cards offered only for health care (from October 1, 2024), but not dental or veterinary bills, general credit cards or home equity lines.

Who the rule covers: Anyone collecting medical debt (providers, collection agencies and debt buyers) may not report it, and credit bureaus may not put it in a credit report

In effect since: October 1, 2024

Law: Minn. Stat. 332C.01, subd. 4; Minn. Stat. 332C.02, clause (20); Minn. Stat. 332C.03

Other limits on collection in Minnesota

Waiting rules

A hospital may not send your bill to collections (in-house or outside), offer or change a payment plan, offer a loan or line of credit, or take a credit card payment over $500 until it has found you ineligible for charity care or denied your application, and it may not do any of these while your charity care application is pending. Before a hospital sends your account to an outside collection agency, a hospital employee must sign an affidavit that the hospital followed the screening rules, that all known insurers were properly billed, that you had a reasonable chance to apply for charity care if you might qualify, and that you were offered a reasonable payment plan if you said you could not pay in full and gave proof if asked. If you or someone else tells a provider or health plan your bill may contain an error, the provider must review it and may not bill you for those services until the review is done. A collector's first letter must give the Minnesota Attorney General's phone number and say: "You have the right to hire your own attorney to represent you in this matter."

Wage garnishment

To garnish your wages or bank account for a hospital bill, the hospital must serve with the summons and complaint an affidavit signed by a hospital employee certifying, among other things, that there is no reasonable basis to believe your wages or bank funds are exempt. Without it, the court must dismiss the case on your motion. For any debt, Minnesota's general limit is stricter than federal law: nothing can be taken if your weekly income is 40 times the minimum wage or less; above that, at most 10%, 15% or 25% of disposable earnings depending on income, and never more than the amount above 40 times the higher of the state or federal minimum wage.

Lawsuit rules

A hospital that sues you over a hospital bill must serve an affidavit of expert review with the summons and complaint (that it followed the screening rules, you likely owe the debt, insurers were billed, you had a chance to apply for charity care, a reasonable payment plan was offered if you asked, and, for a default judgment, that there is no reason to think you already answered by calling or writing, could not answer because of age, disability or illness, or were not served). If it does not, the case must be dismissed with prejudice on your motion. A collector may not sue on a medical debt after the 6-year limit for consumer debt. If you win a medical debt lawsuit brought by a collecting party, the court must award your costs and reasonable attorney fees (a settlement does not count). A collector that breaks these rules can owe you actual damages plus up to $1,000 per violation.

Bank account

The hospital affidavit rule above also applies to garnishing your bank account for a hospital bill. A collector may not challenge your claim that money is exempt from garnishment or levy in a baseless or bad-faith way.

Law: Minn. Stat. 144.587, subd. 4; Minn. Stat. 144.588; Minn. Stat. 62J.808; Minn. Stat. 332C.02; Minn. Stat. 332C.04; Minn. Stat. 332C.05; Minn. Stat. 571.922

Is my debt too old in Minnesota?

A lawsuit on a consumer debt for personal, family or household purposes must be filed within 6 years. A lawsuit on a contract or other obligation, written or not, must also be filed within 6 years.

What can restart the clock

No. Once the 6 years for a consumer debt have run out, a payment, a bankruptcy discharge, or an oral or written promise to pay does not bring the time limit back.

Law: Minn. Stat. 541.053; Minn. Stat. 541.05, subd. 1(1)

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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