Virginia's Medical Debt Protection Act (HB 1725, effective July 1, 2026) caps interest on medical debt at 3% per year and prohibits hospitals and debt collectors from pursuing wage garnishment, home foreclosure, or liens to collect medical bills. The law also requires creditors to wait at least 120 days before filing a lawsuit or seizing assets, and hospitals must notify patients of financial assistance options before any collection attempt. The protections apply broadly: hospitals licensed in Virginia and medical practices with $20 million or more in annual revenue must comply, and medical debt buyers who purchase hospital debt must sign written agreements to follow these same restrictions.
Table of Contents
- What the law prohibits hospitals and collectors from doing
- The 120-day protection before collection begins
- Who is protected and who must follow these rules
- Important exception: using a general-purpose credit card
- What to do if you receive a collection notice
- Medical debt and credit reports
- Frequently Asked Questions
What the law prohibits hospitals and collectors from doing
Virginia § 59.1-612 permanently bans hospitals from using extraordinary collection actions—lawsuits, wage garnishment, bank account levies, property liens, body attachment writs, or arrest—to collect medical bills. These prohibitions apply regardless of how much time has passed or whether you've missed payments. Debt collectors who purchase medical debt from hospitals must agree in writing to the same restrictions.
The law limits interest on all medical debt to 3% annually and prohibits late fees until at least 90 days after the final invoice date. If a hospital or collector ignores these rules, they can be sued under Virginia's Consumer Protection Act, and you may recover damages.
The 120-day protection before collection begins
You have at least 120 days after your bill's due date before a hospital or collector can pursue any extraordinary collection action. Before that window closes—in fact, before any collection action starts at all—the creditor must send you written notice at least 30 days in advance, informing you of the deadline, your right to dispute the debt, and available financial assistance programs.
This notice requirement creates a documented trail. If you receive a collection notice, check that it includes details about hospital financial assistance programs available to you; the absence of this information may indicate a violation. The creditor must give you 30 days to respond after receiving notice.
Who is protected and who must follow these rules
The law covers all hospitals licensed by Virginia's Department of Health and medical practices with annual revenue of $20 million or more. Smaller medical practices and independent physicians may not be bound by all of these restrictions, though other consumer protection laws may still apply. The protections extend to medical debt sold to third-party collectors.
When hospitals sell debt to a debt buyer, that buyer must sign a written agreement agreeing to the 3% interest cap and the ban on extraordinary collection actions. If a debt collector doesn't have such an agreement in place, they are violating the law.
Important exception: using a general-purpose credit card
The protections disappear if you pay your medical bill with a general-purpose credit card like Visa or Mastercard. Once you use such a card, the debt converts to credit card debt and loses all of the medical debt protections—including the 3% interest cap and the ban on wage garnishment. However, dedicated medical credit lines like CareCredit retain their protected status, even though they are credit-based.
The distinction matters: a standard credit card payment is treated as a voluntary choice to convert medical debt into unsecured consumer credit, while a medical credit product is treated as part of the medical billing process. If you are offered medical financing, confirm whether it is a dedicated medical product before deciding how to pay.
What to do if you receive a collection notice
Do not ignore a collection letter. Verify it includes the required 30-day notice and information about hospital financial assistance programs. Contact the hospital's billing department or financial counselor directly—many hospitals will work with you on a payment plan or reduce charges based on income before a debt ever reaches a collector. If the creditor is threatening wage garnishment, bank seizure, or liens, respond to their notice in writing within 30 days, stating that such actions are prohibited under Virginia law.
Keep copies of all correspondence. If collection actions continue after the law's 120-day waiting period has passed but you were never given the required advance notice, that is a violation you can report to Virginia's Attorney General or pursue in civil court under the Consumer Protection Act.
Medical debt and credit reports
Virginia law also prohibits hospitals and collection agencies from reporting medical debt to credit bureaus, a protection in place since July 2024. This means medical bills should not appear on your credit report or damage your credit score, separate from the interest and collection restrictions in HB 1725. If you see medical debt on your credit report, dispute it with the credit bureau and notify the hospital or collector of the violation.
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Frequently Asked Questions
Can a hospital still demand payment or contact me about the debt before 120 days?
Yes. The 120-day restriction only applies to lawsuits and extraordinary collection actions. Billing statements, payment demands, and collection calls are still allowed; only legal action is prohibited during that period.
If I pay with a credit card, do I lose all protections?
Only if you use a general-purpose credit card (Visa, Mastercard, American Express). Dedicated medical credit products like CareCredit retain the protections.
What do I do if a collector is threatening to garnish my wages?
Respond in writing citing Virginia Code § 59.1-612 and state that wage garnishment is prohibited. Keep copies and contact the Virginia Attorney General's consumer protection hotline if threats continue.
Does this law apply to bills from my private doctor's office?
Only if the practice has $20 million or more in annual revenue. Smaller independent practices may not be required to comply.