⚖ California Laws That Protect You
California provides extensive protections for patients facing medical debt. Here are the key laws that debt collectors and hospitals MUST follow:
Civil Code 1788-1788.33 - Rosenthal Fair Debt Collection Practices Act
California's state-level debt collection law that applies to BOTH original creditors (hospitals, doctors) AND collection agencies. Prohibits harassment, threats, false statements, and unfair practices. Violations: $100-$1,000 per violation plus actual damages and attorney fees.
15 U.S.C. 1692 - Federal Fair Debt Collection Practices Act (FDCPA)
Federal law that applies to third-party debt collectors. Provides the right to request debt validation within 30 days, prohibits abusive practices, and allows statutory damages up to $1,000 per lawsuit plus actual damages and attorney fees.
Health & Safety Code 127400-127446 - Hospital Fair Pricing Policies
Requires nonprofit hospitals to establish written charity care and discount payment policies, screen patients for financial assistance eligibility, provide itemized billing statements, and wait 150 days before collection actions. Uninsured patients must be charged no more than the highest amount paid by government payers.
AB 1020 - Medical Debt Protections (2021)
Prohibits medical debt from being reported to credit bureaus until at least 12 months after it becomes delinquent. Requires removal of paid medical debt from credit reports. Strengthens charity care requirements and billing transparency.
SB 1061 - Charity Care Requirements
Expands charity care eligibility for patients with incomes up to 400% of the federal poverty level. Nonprofit hospitals must make reasonable efforts to determine charity care eligibility BEFORE pursuing collections. Requires hospitals to provide financial assistance applications with all billing statements.
Key Protection: 12-Month Credit Reporting Delay
Under California law, medical debt CANNOT appear on your credit report until at least 12 months after it becomes delinquent. If it was reported sooner, you can dispute it and demand removal.
⚠ Common Medical Debt Collection Issues
If any of these situations apply to you, you have strong grounds to dispute the debt and demand the collector back off:
📄 Collection on Disputed/Incorrect Bill
The medical bill contains errors, charges for services not received, duplicate charges, or was paid but not recorded. You have the right to dispute and demand validation with itemized billing.
💰 Failure to Offer Charity Care or Payment Plan
Nonprofit hospitals MUST screen you for charity care eligibility and offer payment plans BEFORE sending to collections. If they skipped this step, the collection may be improper.
📞 Harassment by Medical Debt Collector
Excessive calls, threats, calling your workplace, contacting family members, false statements about consequences, or abusive language. Each violation can result in statutory damages.
⏰ Collection Before Insurance Fully Processed
Bill sent to collections while insurance claim is still pending, during an appeal, or before coordination of benefits was completed. Premature collections can be disputed.
Important: 30-Day Validation Window
When a collector first contacts you, you have 30 days to request debt validation in writing. During validation, they must stop collection activity. Use this window strategically.
💰 What You Can Recover
California law provides multiple avenues for damages when debt collectors violate your rights or hospitals fail to follow proper procedures:
| Violation Type | Potential Recovery |
|---|---|
| Rosenthal Act Violations Harassment, false threats, unfair practices |
$100-$1,000 per violation + actual damages + attorney fees |
| FDCPA Violations Third-party collector misconduct |
Up to $1,000 statutory damages + actual damages + attorney fees |
| Charity Care Eligibility Income below 400% FPL, not screened |
May eliminate debt entirely (100% or partial write-off) |
| Payment Plan Requirement Not offered before collections |
Debt must be withdrawn from collections; right to reasonable plan |
| Improper Credit Reporting Reported before 12 months, or paid debt |
Removal from credit report + potential FCRA damages |
| Premature Collection Action Before 150-day waiting period |
Collection must be withdrawn; potential statutory violations |
Charity Care Can Eliminate Your Debt
If your family income is at or below 400% of the federal poverty level (approximately $124,800 for a family of 4), you may qualify for charity care that reduces or eliminates your hospital bill entirely. Nonprofit hospitals are REQUIRED to screen you before collections.
📝 Demand Letter Template
Send this letter via certified mail with return receipt requested. Customize based on your specific situation and violations.
DEMAND FOR DEBT VALIDATION AND NOTICE OF VIOLATIONS
[Your Name]
[Your Address]
[City, CA ZIP]
[Phone]
[Email]
[Date]
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
[Debt Collector Name / Collection Agency]
[Collector Address]
[City, State ZIP]
Re: Demand for Validation and Notice of Violations
Account Number: [Account/Reference Number]
Original Creditor: [Hospital/Medical Provider Name]
Alleged Amount: $[Amount Claimed]
To Whom It May Concern:
I am writing in response to your [letter dated / phone call on] [Date of Contact] regarding the above-referenced account. This letter constitutes my formal demand for debt validation pursuant to the Fair Debt Collection Practices Act (15 U.S.C. 1692g) and the California Rosenthal Fair Debt Collection Practices Act (Civil Code 1788-1788.33).
DEMAND FOR VALIDATION:
Within thirty (30) days of receipt of this letter, please provide the following documentation:
1. Complete itemized statement showing all charges, payments, adjustments, and the basis for the amount claimed;
2. Copy of the original signed agreement or contract creating the alleged debt;
3. Proof that you are licensed to collect debts in California;
4. Name and address of the original creditor;
5. Documentation showing the date of the original delinquency;
6. Complete chain of assignment/sale of this debt, if applicable;
7. Proof that the statute of limitations has not expired on this debt.
Until you provide this validation, you must cease all collection activity pursuant to 15 U.S.C. 1692g(b).
DISPUTE OF DEBT:
I dispute this debt for the following reasons:
[Select and customize all that apply:]
[ ] The amount claimed is incorrect. My records show [explain discrepancy].
[ ] This debt was already paid on [date] via [payment method].
[ ] Insurance should have covered this charge but was not properly billed/processed.
[ ] I was never properly notified of charity care eligibility as required by Health & Safety Code 127400.
[ ] I was not offered a payment plan before this account was sent to collections.
[ ] This debt was sent to collections before the 150-day waiting period expired.
[ ] I qualify for charity care based on my income level and should have been screened.
[ ] The original bill contained errors that were never resolved.
NOTICE OF VIOLATIONS:
Your collection activities have violated my rights under California and federal law:
[Include all applicable violations:]
[ ] Failure to validate debt upon request (15 U.S.C. 1692g)
[ ] Harassment through excessive phone calls (Civil Code 1788.11)
[ ] False or misleading representations (Civil Code 1788.13)
[ ] Unfair practices (Civil Code 1788.14)
[ ] Collection on debt before proper hospital procedures were followed
[ ] Reporting to credit bureau before 12-month waiting period (AB 1020)
[ ] [Other specific violations]
DEMANDS:
1. Immediately cease all collection activity until proper validation is provided;
2. Remove any negative reporting from all credit bureaus within 30 days;
3. Confirm in writing that this account is being returned to the original creditor or closed;
4. Provide written confirmation that no further collection activity will occur;
5. Pay statutory damages of $[Amount] for the violations described above.
If you do not comply with these demands within thirty (30) days, I will:
- File a complaint with the California Attorney General
- File a complaint with the Consumer Financial Protection Bureau (CFPB)
- Pursue legal action for statutory damages under the Rosenthal Act and FDCPA
- Seek attorney fees and costs as provided by law
This letter is not an acknowledgment of the validity of this debt and should not be construed as such.
Govern yourself accordingly.
Sincerely,
_______________________________
[Your Signature]
[Your Printed Name]
Enclosures:
- Copy of collection letter(s) received
- Copy of original medical bills (if available)
- Insurance Explanation of Benefits (EOBs)
- [Other supporting documents]
cc: California Attorney General (if filing complaint)
Original Creditor: [Hospital Name]
[Your attorney, if applicable]
📋 Evidence to Gather
Collect these documents before sending your demand letter to build the strongest possible case:
- Collection letters - All correspondence from the debt collector, including dates received
- Original medical bills - Itemized statements from the hospital or provider showing all charges
- Insurance EOBs - Explanation of Benefits showing what insurance paid and patient responsibility
- Income documentation - Tax returns, pay stubs, or other proof of income for charity care eligibility
- Phone call logs - Dates, times, and notes from collector calls; save voicemails if possible
- Credit reports - Current reports from all three bureaus showing medical debt reporting
- Payment records - Proof of any payments made on the account
- Hospital financial assistance policy - Request from hospital or find on their website
Record Phone Calls (With Notice)
California is a two-party consent state for recording calls. However, you can inform the collector at the start that you are recording. Many collectors will hang up, but this itself is valuable - it shows they don't want their practices documented.
📅 What Happens After You Send the Letter
Days 1-5: Collector Receives Letter
Collection activity must stop while they validate the debt. If calls continue, document each violation.
Days 5-30: Validation Period
Collector must provide validation documents or cease collection. Many debts are dropped at this stage if they can't validate.
Days 30-45: Review Response
If validation is inadequate or shows violations, send follow-up demanding account closure and credit bureau removal.
Day 45+: Escalate If Needed
File complaints with California AG, CFPB, and consider small claims court (up to $12,500) or consulting an attorney for larger claims.
Apply for Charity Care Directly
Even if your debt is in collections, contact the original hospital and request a charity care application. Under California law, they must evaluate your eligibility. If you qualify, the debt may be reduced or eliminated entirely.
❓ Frequently Asked Questions
Can a hospital send me to collections in California?
Yes, but California has strict rules. Nonprofit hospitals must wait at least 150 days after the first billing statement before sending to collections. They must also notify you about charity care eligibility and offer a payment plan. If they skip these steps, the debt may be unenforceable and you can demand it be withdrawn from collections.
What is charity care and do I qualify?
Charity care is free or discounted hospital care that nonprofit hospitals MUST provide to low-income patients under California law (Health & Safety Code 127400-127446). If your family income is at or below 400% of the federal poverty level (about $124,800 for a family of 4), you likely qualify for reduced bills. Some patients qualify for 100% free care. Hospitals must screen you for eligibility before sending to collections.
How long before medical debt can be sent to collections?
Under California law, nonprofit hospitals must wait at least 150 days after the first post-discharge billing statement before reporting to collections or credit bureaus. During this time, they must provide a plain-language billing statement, notify you of financial assistance programs, and attempt to determine if you qualify for charity care or payment plans.
Can medical debt affect my credit score in California?
California provides strong protections. Medical debt cannot be reported to credit bureaus until at least 12 months after it becomes delinquent. Additionally, paid medical debt must be removed from your credit report. The CFPB has also banned medical debt under $500 from appearing on credit reports. If medical debt was reported prematurely, you can dispute it and demand removal.
What are my rights under California's Rosenthal Act?
The Rosenthal Fair Debt Collection Practices Act (Civil Code 1788-1788.33) protects California consumers from abusive debt collection. Collectors cannot harass you, call at unreasonable hours, threaten legal action they cannot take, or contact your employer. Unlike the federal FDCPA, Rosenthal applies to original creditors (like hospitals) AND collection agencies. Violations can result in $100-$1,000 per violation plus actual damages.
How do I dispute a medical debt?
Send a written debt validation letter within 30 days of first contact from a collector. Request verification of the debt amount, the original creditor, proof they can collect in California, and itemized billing records. While they're validating, they must stop collection activity. If the debt is incorrect, disputed, or they violated collection rules, demand it be withdrawn and removed from your credit report.
Aggressive Collector? Violations of Your Rights?
If you're facing harassment from medical debt collectors or hospitals violated California law, I can help you fight back and potentially recover damages.
Contact: owner@terms.law📅 Schedule a Consultation
For complex medical debt issues, charity care disputes, or collection harassment cases, book a call to discuss your options.
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