Introduction — Why medical collections in California are different now
Medical debt collection has changed substantially over the last few years. Federal and California reforms limit how medical bills are reported and collected, give you tools to pause or stop collection attempts, and expand state oversight of collection companies operating in California. If you’re getting calls, letters, wage‑garnishment threats, or lawsuits over hospital or provider bills, this guide gives a prioritized plan — immediate steps, negotiation language you can use today, and practical rules for when bankruptcy is the better option.
Key recent developments: the Consumer Financial Protection Bureau finalized a rule barring medical bills from credit reports used by lenders; California’s Department of Financial Protection and Innovation (DFPI) now licenses and regulates many collectors; and the Rosenthal Fair Debt Collection Practices Act was expanded in scope for certain obligations. These changes affect both your leverage and the paperwork collectors must provide.
Immediate rights and first‑response steps (what to do in the first 72 hours)
If a collector contacts you about a medical bill, move quickly and document everything. Follow this prioritized checklist:
- Don’t give payment or personal financial details by phone. Ask for written verification and send requests by certified mail.
- Request a debt validation/verification in writing within 30 days of the collector’s first written communication — this triggers a legal pause in many collection activities while the collector verifies the debt. Under federal rules (FDCPA/Regulation F) collectors must provide validation information and the consumer has a 30‑day dispute window.
- Check the statute of limitations. In California, many collection suits must be filed within four years for written contracts or book/account claims — if the claim is time‑barred you can refuse to pay and the collector cannot successfully sue after the limitation period. (Statutes depend on the contract type and facts — always verify dates.)
- Explore hospital financial assistance before paying. Tax‑exempt hospitals must wait and give patients time to apply for charity/financial assistance (IRS and CMS rules create 120/240‑day windows before certain extraordinary collection actions). Use hospital billing advocates — many balances can be reduced or forgiven.
- If you want the collector to stop calling: send a written cease‑and‑desist (see template below). That usually forces mail‑only contact; it does not make the debt disappear but can stop harassment and create evidence of violations if they continue.
Keep copies of every letter (certified mail return receipt), record dates/times of phone calls, and save emails and texts. These records are essential if you need to file a complaint with state regulators or the CFPB.
Practical scripts and sample letters you can use today
Below are short, plain‑language templates you can adapt. Send key letters by certified mail, return receipt requested and keep a copy.
1) Debt validation / dispute (send within 30 days of first notice)
DATE VIA CERTIFIED MAIL [Collection Company Name & Address] Re: Account #________ To whom it may concern: I dispute the validity of the debt you claim I owe and request that you validate the debt as required by the Fair Debt Collection Practices Act and California law. Please provide: (1) the name of the original creditor; (2) a complete itemization showing charges, payments, interest and fees; (3) evidence you own or are authorized to collect the debt (chain of assignment); and (4) the date of last payment. Until you provide proper verification, cease collection efforts and do not report this account to consumer reporting agencies as owed by me. I am preserving all rights. Sincerely, [Name] [Address]
Why this works: Sending a timely written dispute forces a verification process; collectors often cannot prove chain‑of‑title for old medical bills and will stop or negotiate. See FDCPA/Regulation F for the validation rules.
2) Cease and desist (if calls/texts are harassment)
DATE VIA CERTIFIED MAIL [Collection Company Name & Address] Re: Account #________ Pursuant to 15 U.S.C. §1692c(c) and the California Rosenthal Act, I request that you cease all communication with me except to (1) confirm receipt of this letter, (2) inform me you will terminate collection efforts, or (3) notify me of a specific intent to sue. Any further contact will be reported to the CFPB and the California DFPI and may be the basis for legal action. Sincerely, [Name] [Address]
Keep in mind a cease‑and‑desist stops calls but does not eliminate the debt or prevent a lawsuit; it is a defensive, harassment‑stopping tool.
3) Negotiation script for a settlement or a payment plan (phone or mail)
"I want to resolve this but I need verification first. If you can provide proof of ownership and an itemized balance, I'm willing to consider a lump‑sum settlement of $X or a payment plan of $Y/month. Any agreement must be in writing and state that the account will be reported as 'settled' or 'paid as agreed' to the credit bureaus (if applicable)."
Tip: Get any settlement fully in writing and demand the collector remove negative reporting or mark the account accurately before you pay.