Can a hospital garnish your wages?

Can a hospital garnish your wages? Only after it sues and wins. A hospital is a private creditor and the CFPB says most creditors can only garnish after a court issues a judgment. Answer the lawsuit by the date on the papers, because a default judgment is what allows the order, per the CFPB.

The 120 days before a hospital can act

Nonprofit hospitals follow IRS rules. They must refrain from extraordinary collection, which includes suing, for at least 120 days after the first post-discharge bill, per the IRS 501(r) page. They must tell you about financial assistance first. For-profit hospitals do not follow these rules, but they still need a judgment.

Financial assistance can erase the bill

You have 240 days from the first post-discharge bill to apply for financial assistance. Apply even if the bill is already with a collector, since a complete application within those 240 days must be decided. Some or all of a $4,000 bill can be written off if you qualify.

How much can a hospital garnish your wages?

Wage garnishment for medical bills uses the general federal cap: the smaller of 25% of disposable pay or the amount above $217.50 a week, per the Department of Labor. A lower state limit wins. Texas, Pennsylvania and North Carolina shield most wages from hospital judgments.

Time limits apply too: most states allow three to six years to sue, the CFPB notes.

Settling the bill

Hospitals and medical collectors often take less than the full bill, especially before court. Ask for an itemized bill, check it for errors, then offer a lump sum or a plan in writing. If a judgment already exists, the deal should include a garnishment release.