Medical debt collection laws in Georgia give collectors six years to sue you on an unpaid bill, and layer federal rules on top that control how they contact you, what they must prove if you dispute the debt, and what it costs them if they break the rules. Knowing the deadlines and the tools is the difference between being pushed around by a collector and shutting one down.
How Long a Collector Can Sue You
Medical debt in Georgia is treated as a written contract, so a collector has six years from the date the debt became due and payable to file a lawsuit.1Justia. Georgia Code 9-3-24 – Actions on Simple Written Contracts After that window closes, the collector can’t win a suit on the merits, but the court will not throw the case out on its own. You have to appear and raise the expired statute of limitations as a defense.
That leads to the single most damaging mistake people make with old medical debt: ignoring the lawsuit. If you don’t answer within 30 days of being served, the collector gets a default judgment no matter how old the debt is. In Georgia, a judgment is enforceable for seven years and can be renewed for another seven, which gives the collector up to 14 years of garnishment and levy power on a debt they never should have been able to collect.
One trap to watch for on aging debt: making even a small payment, or acknowledging the debt in writing, can restart the six-year clock. A “good faith” $20 payment on a five-year-old hospital bill can hand the collector a fresh six-year runway to sue.
Notice and Your Right to Dispute
Within five days of first contacting you, a collector must send a written notice showing the amount owed, the creditor’s name, and a statement explaining your right to dispute the debt within 30 days.2Office of the Law Revision Counsel. 15 USC 1692g – Validation of Debts No notice means the collector has already broken federal law.
When you send a written dispute inside that 30-day window, the collector must stop all collection activity until they mail you verification of the debt. No calls, no letters, no credit bureau reporting while the dispute sits open.2Office of the Law Revision Counsel. 15 USC 1692g – Validation of Debts A collector who resumes collection without verifying gives you a defense in court and a basis for damages.
Dispute in writing. A phone dispute does not trigger the verification requirement the same way. Send the letter by certified mail with return receipt requested so you have proof of the date the collector received it.
When and How Collectors Can Contact You
A collector cannot contact you before 8:00 a.m. or after 9:00 p.m. in your local time zone. They cannot call your workplace if they know or should know your employer prohibits it. If you have an attorney representing you on the debt, the collector must go through your attorney instead of contacting you directly.3Office of the Law Revision Counsel. 15 USC 1692c – Communication in Connection With Debt Collection
You can also send a written request telling the collector to stop contacting you altogether. Once they receive it, they can only reach out to confirm they’re stopping efforts or to give you notice of a specific legal action like a lawsuit. The debt survives, but the calls stop.
Extra Rules for Nonprofit Hospital Debt
If the bill comes from a nonprofit hospital, federal tax law adds requirements the hospital must meet before any collection can start. Under Section 501(r), every tax-exempt hospital must maintain a written financial assistance policy covering all emergency and medically necessary care, spelling out eligibility, explaining how to apply, and publicizing it widely.4eCFR. 26 CFR 1.501(r)-4 – Financial Assistance Policy and Emergency Medical Care Policy
Before a nonprofit hospital can take any extraordinary collection action, it must make reasonable efforts to determine whether you qualify for financial assistance. The IRS defines extraordinary collection actions broadly: filing a lawsuit, placing a lien on your property, garnishing wages, seizing bank accounts, selling your debt, and reporting it to credit bureaus.5Internal Revenue Service. Billing and Collections – Section 501(r)(6)
The hospital has to wait at least 120 days after the first billing statement before any of that starts, and you have 240 days from that first statement to apply for financial assistance.5Internal Revenue Service. Billing and Collections – Section 501(r)(6) Plenty of patients qualify for reduced or free care under these policies and never apply, either because the hospital never told them or because they assumed they wouldn’t qualify. If you’re being collected on for care from a nonprofit hospital, ask for the financial assistance application before anything else.
Surprise Bills That May Not Be Valid Debt
Some medical debt shouldn’t exist to begin with. The federal No Surprises Act protects you from unexpected bills when you receive emergency care from an out-of-network provider, or when an out-of-network doctor treats you at an in-network facility.6Office of the Law Revision Counsel. 42 USC 300gg-111 – Preventing Surprise Medical Bills In those situations, you cannot be balance billed for more than your plan’s in-network cost-sharing amount, and those payments count toward your in-network deductible and out-of-pocket maximums.7U.S. Department of Labor. Avoid Surprise Healthcare Expenses – How the No Surprises Act Can Protect You
The law does not apply when you voluntarily go out-of-network for non-emergency care. And in some non-emergency situations, a provider can ask you to sign a consent form waiving the protections at least 72 hours before the procedure. Without proper notice and consent, the provider cannot balance bill you. If a collector is chasing what looks like a surprise bill, check whether the No Surprises Act should have applied. The debt may not be valid at all.
If a Collector Sues You
Georgia collectors do sue over medical bills. Once you’re served, you generally have 30 days to file an answer with the court. This is the single most important deadline in the process. Miss it and the court enters a default judgment, at which point the collector can pursue aggressive enforcement whether the underlying debt was valid, time-barred, or inflated.
A Georgia judgment earns interest at the federal prime rate plus three percent per year.8Justia. Georgia Code 7-4-12 – Interest on Judgments That interest compounds while the collector uses wage garnishment, bank account levies, and property liens to collect.
State law does shield some assets. Equity in your primary residence up to a set threshold, a portion of your vehicle’s value, and retirement accounts are generally protected from judgment creditors under Georgia’s exemption statutes. Federal law separately protects Social Security benefits, disability payments, and veterans’ benefits from garnishment for most private debts, medical bills included.
Medical Debt on Your Credit Report
Medical debt can still appear on your credit report, but the ground has shifted. In 2023, Equifax, Experian, and TransUnion voluntarily agreed to stop reporting medical debts under $500, whether they’re in collections or unpaid.
In 2024, the Consumer Financial Protection Bureau finalized a rule that would have banned medical debt from credit reports entirely. A federal court vacated that rule in July 2025, holding that the Fair Credit Reporting Act permits credit bureaus to include properly coded medical debt information without revealing the specific condition or provider. As of 2026, there is no federal prohibition on reporting medical debt above the $500 voluntary threshold.
When medical debt does appear, the FDCPA’s dispute and verification rules still apply. A collector who reports a debt to credit bureaus while your written dispute is pending has violated federal law, and you can demand correction. You can also dispute inaccurate medical debt directly with the credit bureaus under the Fair Credit Reporting Act.
Penalties When a Collector Breaks the Rules
Under the FDCPA, you can sue a collector individually and recover your actual damages plus up to $1,000 in statutory damages, along with reasonable attorney fees and court costs. The $1,000 cap applies per lawsuit, not per violation. In a class action, the court can award up to $500,000 or one percent of the collector’s net worth, whichever is less.9Office of the Law Revision Counsel. 15 USC 1692k – Civil Liability Many FDCPA attorneys take these cases on contingency or fee-shifting terms, so the collector pays the fees if you win.
Georgia’s Fair Business Practices Act separately prohibits deceptive and unfair practices in consumer transactions, which reaches medical debt collection.10Justia. Georgia Code 10-1-393 – Unfair or Deceptive Practices in Consumer Transactions Unlawful Penalties depend on how the case is pursued: up to $2,000 per violation by administrative order, up to $5,000 per violation if the Attorney General takes it to court, and up to $25,000 per violation for breaking a court injunction.11State of Georgia. Fair Business Practices Act
One boundary worth knowing on where to complain: the Georgia Department of Banking and Finance does not regulate collection agencies or debt collectors.12Department of Banking and Finance. Debt Collection The state route is a complaint to the Attorney General’s office; the federal route is an FDCPA claim.
Tax Consequences If You Settle
When a creditor cancels or settles a medical debt for less than the full amount owed, the IRS generally treats the forgiven portion as taxable income. If the canceled amount is $600 or more, the creditor must file Form 1099-C and send you a copy.13Internal Revenue Service. Instructions for Forms 1099-A and 1099-C You report that amount on your return for the year the cancellation occurred.14Internal Revenue Service. Topic No. 431 – Canceled Debt, Is It Taxable or Not
The important exception: if your total liabilities exceed the fair market value of your assets when the debt is canceled, you’re insolvent, and you can exclude the forgiven amount from income up to the extent of that insolvency.15Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness File Form 982 with your return to claim it. Debt discharged through a Title 11 bankruptcy case is also excluded.14Internal Revenue Service. Topic No. 431 – Canceled Debt, Is It Taxable or Not
Factor the tax hit into your settlement math. Settling a $15,000 hospital bill for $5,000 can leave you owing income tax on the $10,000 difference.
Bankruptcy When Nothing Else Works
Chapter 7 bankruptcy discharges qualifying medical debt completely, typically in three to six months from filing, with no repayment plan. Eligibility depends on the means test, which compares your income to Georgia’s median for your household size. If you earn too much for Chapter 7, Chapter 13 lets you repay a portion of the debt over three to five years and discharge the rest at the end. Either filing stays on your credit report for seven to ten years, so it’s a last-resort tool.
Filing also triggers an automatic stay that immediately halts collection activity, including lawsuits, wage garnishment, and phone calls. If a collector already has a judgment against you and is moving to garnish, the automatic stay is the fastest legal way to stop them.