Medical debt and credit reports in New York

The rule in New York

Full ban

Hospitals, licensed health care professionals and ambulance services may not report any part of a medical debt to a credit bureau, and their contracts with collectors and debt buyers must forbid it. Any part of a medical debt that is reported is void. Credit bureaus may not report or keep information about medical debt, no matter when it was incurred. Debt charged to a regular credit card is not medical debt under this law; debt on a medical credit card is.

Who the rule covers: Both: hospitals, licensed health care professionals and certified ambulance services may not send medical debt to credit bureaus (and must forbid their collectors and debt buyers from doing so in their contracts), and credit bureaus may not report or keep medical debt in your file.

In effect since: December 13, 2023

It covers both paid and unpaid debt.

Law: N.Y. Public Health Law 4925-4927; N.Y. General Business Law 380-a(v), 380-j(a)(3), 380-j(f)(1)(viii)

Other limits on collection in New York

Waiting rules

Wait before collections: 180 days after the first bill

Wait before a lawsuit: 180 days after the first bill

A hospital or its collection agent may not sue you or hand your bill to a debt collector until at least 180 days after the first bill after your care, and not until the hospital has made reasonable efforts to find out whether you qualify for financial assistance. The hospital must give you written notice, including on a bill, at least 30 days before it refers a debt to collections. It may not send your account to collections while it is deciding a complete financial assistance application. A collection agency must get the hospital's written consent before suing.

Liens on your home

No property lien may be entered or enforced against your primary home on a medical debt judgment won by a hospital or a licensed health care professional. Hospital policies must also forbid the forced sale or foreclosure of your primary home to collect a medical bill.

Wage garnishment

Your wages cannot be garnished at all on a medical debt judgment won by a hospital or licensed health care professional. For other judgments, New York's general limit (no more than 10% of gross income, and less for low earners) is stricter than federal law.

Selling the debt

A hospital may not sell medical debt to a third party unless the buyer is buying it to forgive the debt.

Lawsuit rules

A hospital may not sue patients whose income is below 400% of the federal poverty level. In any lawsuit by or for a hospital over medical debt, the complaint must include a sworn statement by the hospital's chief financial officer that, based on reasonable efforts, the patient's income is not below 400% of the poverty level. Hospitals may not collect from patients who were eligible for Medicaid at the time of service for services Medicaid covers, and may not deny medically necessary care because of an unpaid bill.

Law: N.Y. Public Health Law 2807-k(9-a)(d), (h), (l); N.Y. CPLR 5004, 5201(b), 5231(b)

Is my debt too old in New York?

A hospital or a licensed health care professional must sue on a medical debt within 3 years of treatment. A lawsuit arising out of a consumer credit transaction must be filed within 3 years. Other contract claims, written or not, have 6 years.

What can restart the clock

For consumer credit transactions, once the 3 years have run out, a later payment, a written or spoken promise or other activity on the debt does not revive or extend the time. In general, a promise or acknowledgment counts only if it is in writing and signed by you.

When the clock starts

For medical debt owed to a hospital or licensed health care professional, the 3 years run from the date of treatment.

Law: N.Y. CPLR 213(2), 213-d, 214-i; N.Y. General Obligations Law 17-101

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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