What Happens if You Don’t Pay Medical Bills in California?

You may be wondering: what happens if you don’t pay medical bills in California?
If you don’t pay medical bills in California, providers may send the debt to collections, report it to credit bureaus, sue for a judgment, or pursue wage garnishment and bank levies to recover payment.

If unpaid medical bills are overwhelming you, there are ways to stop collections and protect your income. Call Kostopoulos Bankruptcy Law at 877-969-7482 to speak with an experienced California bankruptcy and debt relief attorney. With decades of experience helping clients discharge medical debt and stop lawsuits, we’ll explain your legal rights and guide you toward lasting relief.

In this article, I’ll detail the consequences of unpaid medical bills in California and how to stop aggressive collection actions.

What Happens When Medical Bills Go Unpaid?

Unpaid medical bills in California don’t just go away. Instead, they typically trigger several escalating actions by hospitals, clinics, or third-party collectors.

1. Debt Moves to Collections

After 90–180 days of non-payment, most medical providers will sell or assign your debt to a third-party collection agency. These agencies aggressively pursue repayment, often with frequent phone calls and letters.

2. Credit Reporting and Score Impact

New federal credit reporting rules require a one-year waiting period before medical debt can appear on your credit report. However, if the debt remains unpaid after that time and exceeds $500, it will still show up and negatively affect your credit score, making it harder to qualify for loans or housing.

3. Lawsuits and Court Judgments

If collections fail, a creditor can sue you in California state court. If they win a judgment, they may:

• Garnish up to 25% of your disposable wages

• Place liens on your property

• Seize funds from your bank account

4. Interest and Additional Fees

Under California law, judgments can accrue interest of up to 10% annually, causing your debt to grow even larger over time.

Legal Consequences of Ignoring Medical Debt

Failure to respond to medical debt can lead to significant legal and financial repercussions, including:

• Wage Garnishments: Court orders that deduct a portion of your paycheck.

• Property Liens: Encumbrances that must be paid before you can sell or refinance property.

• Bank Levies: Direct withdrawal of funds from your checking or savings account.

While you cannot be arrested for unpaid medical bills, these actions can severely disrupt your financial stability.

How to Protect Yourself From Medical Debt Collection

Even if you’ve fallen behind on medical bills, you have options to protect your assets and income.

1. Negotiate with the Provider

Hospitals often have hardship or charity programs that can reduce or forgive your balance if you can prove financial difficulty.

2. Consider Debt Settlement

In some cases, collection agencies may accept a lump-sum payment for less than the full amount owed.

3. Understand Your Exemptions

California law protects certain income (such as Social Security or disability benefits) and property from creditors, even after a judgment.

4. File for Bankruptcy

Chapter 7 or Chapter 13 bankruptcy can discharge or reorganize medical debt, immediately stopping lawsuits, garnishments, and creditor harassment.

When to Speak with a California Bankruptcy Attorney

If you’re receiving collection notices, facing a lawsuit, or worried about wage garnishment, now is the time to act. Speaking with an experienced bankruptcy attorney can help you:

• Stop debt collection through the automatic stay

• Eliminate medical debt entirely under Chapter 7

• Set up an affordable repayment plan under Chapter 13

• Protect your home, wages, and retirement accounts from creditors

Call Kostopoulos Bankruptcy Law for Immediate Relief

Medical debt can feel impossible to manage, but you have legal rights and solutions available. At Kostopoulos Bankruptcy Law, we’ve helped thousands of California residents eliminate medical debt, stop lawsuits, and rebuild their financial lives.

Call us today at 877-969-7482 for a free, no-obligation consultation. We’ll review your situation, explain your options, and guide you toward the fastest path to financial recovery.