Ohio Medical Debt Collection Laws: Lawsuits, Garnishment, and Credit

Ohio medical debt collection laws give patients several concrete defenses: a six-year deadline for most provider lawsuits, a capped statutory interest rate on unpaid bills, wage and home-equity protections that survive a judgment, and, once a bill is handed to an outside agency, the full weight of the federal Fair Debt Collection Practices Act. The rules that apply depend on who is chasing the money — the original provider, a non-profit hospital, or a third-party collector.

How Long a Provider Has to Sue You

Medical care for personal or family purposes counts as a consumer transaction in Ohio, and Senate Bill 13 set that clock in 2021. The lawsuit window is six years, measured from 30 calendar days after the last charge or last payment on the account, whichever is later.¹

Read that trigger carefully. A small payment on an old balance restarts the six years. If you’re within reach of the deadline, sending a partial payment is the fastest way to give a creditor another six years to sue.

Written contracts with a provider also carry a six-year limit under ORC 2305.06.² Oral or implied agreements fall under a four-year rule.¹

Once the deadline expires, the provider or collector loses the right to sue. They can still ask for payment. They cannot threaten a lawsuit they’re barred from filing.

Interest on Unpaid Medical Bills

If nothing you signed sets an interest rate, Ohio caps what accrues on an unpaid bill. Under ORC 1343.03, the rate is set annually by the state tax commissioner using the federal short-term rate as of July, rounded to the nearest whole percent, plus three points.³⁴ For 2026, that comes out to 7%.⁵

If you signed hospital paperwork that included an interest provision, the contract rate governs instead. Interest only begins accruing once the debt is due and payable, so the initial billing period before the first statement is interest-free.

What a Debt Collector Can and Cannot Do

When your bill leaves the hospital’s own billing office and goes to a third-party agency or debt buyer, the federal Fair Debt Collection Practices Act applies.⁶ The FDCPA does not cover the original hospital or doctor collecting its own bill.

The Validation Notice

Within five days of first contacting you, the collector must send a written validation notice with the amount owed, the name of the creditor, and a statement of your right to dispute. You have 30 days to dispute in writing. If you do, the collector must halt collection until it sends you verification of the debt or a copy of a judgment.⁷

This window matters because medical billing errors are common. If insurance already paid, if the bill went to the wrong plan, or if the amount looks off, a written dispute forces the collector to prove the debt before it can keep pushing.

Prohibited Conduct

Collectors cannot call you before 9 a.m. or after 8 p.m., use threatening or abusive language, misrepresent the amount owed, falsely claim legal action is imminent, or contact you at work after you’ve told them to stop.⁸ A written request to stop contact must be honored, though it does not erase the underlying debt.

Ohio’s Consumer Sales Practices Act

Ohio’s Consumer Sales Practices Act reaches deceptive conduct by third-party collectors and debt buyers, even though its definition of “consumer transaction” excludes transactions directly between physicians or dentists and their patients.⁹ Misrepresenting the amount owed, faking legal authority, and other deceptive collection tactics can draw Ohio Attorney General enforcement on top of any FDCPA claim.¹⁰

Medical Debt on Your Credit Report

Since April 2023, the three major credit bureaus have voluntarily stopped reporting medical collections under $500, paid medical collections of any size, and medical debts less than a year old.¹¹ A CFPB rule finalized in early 2025 would have removed medical debt from credit reports entirely, but a federal court blocked it later that year, so it is not currently in effect. Unpaid medical collections above $500 and more than a year old can still appear.

Non-profit hospitals face an additional restriction under Section 501(r) of the Internal Revenue Code: they cannot report your debt to a credit bureau, sell it, garnish wages, sue, or place a lien until they have made reasonable efforts to screen you for financial assistance and waited out the required notification period.¹²

Bills You May Not Actually Owe

Non-Profit Hospital Financial Assistance

Care at an Ohio non-profit hospital may qualify for full write-off. Hospitals funded through the Hospital Care Assurance Program must provide basic, medically necessary services at no charge to Ohio residents at or below the federal poverty line who aren’t on Medicaid. The first bill and at least one follow-up must include a written explanation of that free care, the current poverty guidelines, and how to apply.¹³ A bill that arrives without that notice signals the hospital hasn’t met its HCAP obligations.

Section 501(r) adds a federal layer for tax-exempt hospitals. After the first post-discharge billing statement, you get a 120-day window before the hospital can start extraordinary collection actions and 240 days to submit a financial assistance application.¹² Many non-profit hospitals set their own thresholds well above the poverty line, often between 200% and 400% of the poverty guidelines. Ask the billing department for a copy of the policy.

Balance Bills Under the No Surprises Act

The federal No Surprises Act protects patients from balance billing for emergency services in a hospital or freestanding emergency facility (including pre- and post-stabilization care), for out-of-network providers such as anesthesiologists, radiologists, and pathologists at an in-network facility, and for out-of-network air ambulance transport.¹⁴ You can only be charged your normal in-network cost-sharing amount, and the provider and insurer settle the rest between themselves.

The law does not cover non-emergency services at an out-of-network facility or treatments your plan doesn’t cover at all. If a collector contacts you about a balance bill that should have been covered, dispute it immediately in writing.

Wage Garnishment After a Judgment

A medical creditor cannot touch your paycheck without first winning a lawsuit and going through a formal garnishment proceeding under Chapter 2716 of the Ohio Revised Code.¹⁵

Even with a judgment, federal law caps what can be taken. Under 15 U.S.C. § 1673, the garnishment cannot exceed the lesser of:⁸

25% of your disposable earnings for the pay period, or
The amount by which disposable earnings exceed 30 times the federal minimum wage of $7.25 per hour, which protects $217.50 per week.

If your disposable earnings are $217.50 or less per week, the entire paycheck is off-limits. Ohio also bars your employer from firing you solely because a single judgment creditor garnished your wages within a 12-month period.¹⁵

Home Equity Protection for Medical Judgments

Ohio treats medical judgments differently from most others when it comes to your house. Under ORC 2329.66, a judgment for money owed on healthcare services or supplies cannot reach up to $125,000 of equity in your home.¹⁶

The judgment lien still attaches to the property, but it cannot be enforced while you, your surviving spouse, or a minor child live there. It becomes enforceable only if the property is sold or transferred to someone other than a surviving spouse or minor child.¹⁶ A medical creditor cannot force you out of your home to satisfy the debt.

Taxes When Medical Debt Is Forgiven

If a hospital, provider, or collector writes off part of your bill, the IRS generally treats the forgiven amount as taxable income. You may receive a Form 1099-C for the year the debt was cancelled.¹⁷

The insolvency exclusion often rescues people with medical debt. If your total liabilities exceeded the fair market value of your total assets immediately before the cancellation, you can exclude the forgiven amount from income up to the amount of that insolvency.¹⁸ Claim it by filing Form 982 with your return and completing the IRS insolvency worksheet, which lists medical bills as a qualifying liability.¹⁹ The exclusion does require you to reduce certain tax attributes such as net operating losses, but it prevents an unexpected tax bill in the year the debt disappears.

1
Ohio Legislative Service Commission. Ohio Code 2305.07 – Contract Not in Writing; Statutory Liability; Consumer Transactions
2
Ohio Legislative Service Commission. Ohio Code 2305.06 – Contract in Writing
3
Ohio Legislative Service Commission. Ohio Revised Code 1343.03 – Rate Not Stipulated
4
Ohio Legislative Service Commission. Ohio Revised Code 5703.47 – Definition of Federal Short Term Rate
5
Ohio Department of Taxation. Annual Certified Interest Rates
6
Consumer Financial Protection Bureau. What Should I Know About Debt Collection and Credit Reporting if My Medical Bill Was Sent to Collections?
7
Consumer Financial Protection Bureau. Regulation F – 1006.34 Notice for Validation of Debts
8
Office of the Law Revision Counsel. United States Code Title 15 Section 1673
9
Ohio Legislative Service Commission. Ohio Revised Code 1345.02 – Unfair or Deceptive Acts or Practices
10
Ohio Legislative Service Commission. Ohio Revised Code 1345.07 – Remedies of Attorney General
11
Consumer Financial Protection Bureau. Medical Debt: Anything Already Paid or Under $500 Should No Longer Be on Your Credit Report
12
Internal Revenue Service. Billing and Collections – Section 501(r)(6)
13
Ohio Legislative Service Commission. Ohio Revised Code 5168.14 – Providing Basic, Medically Necessary Hospital-Level Services
14
U.S. Department of Labor. Avoid Surprise Healthcare Expenses: How the No Surprises Act Can Protect You
15
Ohio Legislative Service Commission. Ohio Revised Code 2716 – Garnishment
16
Ohio Legislative Service Commission. Ohio Revised Code 2329.66 – Exempted Interests and Rights
17
Internal Revenue Service. Topic No. 431 – Canceled Debt: Is It Taxable or Not?
18
Office of the Law Revision Counsel. United States Code Title 26 Section 108
19
Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments