Yes, you can be sued for unpaid medical bills. Hospitals, doctors, and collection agencies all have the legal right to file a lawsuit to collect what you owe. And they do. According to research from the Consumer Financial Protection Bureau, medical debt lawsuits are one of the most common types of debt collection cases in the U.S.
Who sues: Smaller providers and collection agencies are more likely to sue than large hospital systems. Large nonprofit hospitals generally prefer to offer financial assistance and payment plans rather than take patients to court (partly because of the PR risk and partly because IRS rules for nonprofits encourage this). But for-profit hospitals and collection agencies that bought the debt are more aggressive about litigation.
When they sue: Lawsuits typically happen after the debt has been in collections for several months with no payment or response. Most collectors will attempt to negotiate before filing suit. If you've been ignoring calls and letters for 6 to 12 months, a lawsuit becomes more likely.
What happens if you're sued:
You'll be served with a summons and complaint. You have a limited time to respond (usually 20 to 30 days depending on your state). If you don't respond, the creditor gets a default judgment. With a judgment, they can garnish your wages, levy your bank accounts, or place a lien on your property. Default judgments account for the majority of debt collection case outcomes because people don't respond.
How to protect yourself:
Always respond to a lawsuit. Even if you owe the money, showing up gives you the chance to negotiate a settlement, set up a payment plan approved by the court, or raise defenses. Many judges will order mediation, which often results in a payment plan you can actually afford.
Check the statute of limitations. Medical debt has a statute of limitations that varies by state (typically 3 to 6 years). If the debt is past the statute of limitations, you have an affirmative defense against the lawsuit. But you must raise this defense in your response. The court won't do it for you.
Look into legal aid. If your income is below 125% to 200% of the federal poverty level, you may qualify for free legal representation through your local Legal Aid office. Even a brief consultation can help you understand your options.
Prevention: If you have medical debt you can't pay, communicate with the billing department or collection agency. Set up even a small monthly payment ($25 or $50). Creditors are much less likely to sue someone who's making payments and staying in contact than someone who's gone completely silent.