What is the statute of limitations on collection of debt resulting from a medical bill?

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What is the statute of limitations on collection of debt resulting from a medical bill?

In 2004 I had a verbal agreement with a physical therapist in IL, who agreed to accept a co-pay and insurance payments for services rendered, (waiving any resulting balance due and payable by me). Now, 6 years later, I am getting a bill for said remainder. As they are breaking our verbal agreement, can I be held responsible for the balance?

Asked on November 11, 2010 under Bankruptcy Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

In Arkansas, the statute of limitations for an oral (often called verbal) contract is 3 years, while the statute on a written contract is five years. The original debt was probably based on a written contract--an agreement or invoice--in which case it could be enforced (collected on) up to five years later. If there was only an oral agreement from the beginning, it's only enforceable for three years.) That means that if the debt arose in 2004, it's not clear that you could be sued on it any longer (since it's 2010); generally speaking, if someone does not try to collect until after the statute of limitations ran out, there is no possiblility of taking legal action to force the alleged debtor to pay. That said, the statute of limitations begins running from when the event giving rise to a cause of action occured, so if, for example, what happened was  that in 2005 or  2006 the insurer defaulted on or denied payment for the claim, that could be when the cause of action accrued and the five years started running from them. So depending on the circumstances, it may be possible, ignoring your verbal agreement, to hold you responsible for the balance, if in originally getting the services, you signed anything (so written contract for debt) saying you'd pay, and if also the event giving rise to the collections attempt, such as nonpayment by an insurer, occured within the last 5 years.

As for the oral/verbal agreement: as a matter of law, an oral agreement is enforceable; as a practical matter, proving that it existed and what it's terms are can be very difficult, if the other side has a different recollection, no recollection, or actively denies it. So in theory, if there was an oral agreement to settle the debt, that should be enforceable, but if there's no record of it anywhere, proving it may be exceptionally difficult.


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