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New Maine Medical Debt Collection Laws

Patrick Austin, J.D. | September 27, 2024

Patrick Austin
Attorney from George Mason
Patrick Austin, JD

Patrick Austin is a licensed attorney with a background in data privacy and information security law. Patrick received his law degree at George Mason University's Antonin Scalia Law School, where he served as the Editor-in-Chief for the National Security Law Journal.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Residents in Maine with medical debt can sleep a little easier tonight considering the Maine legislature enacted a new law that places limitations on the collection of medical debt. The new law provides further protection for consumers, on top of the Fair Debt Collection Practices Act.

If you live in Maine and have significant medical debt, time to pop some bubbly. State lawmakers recently enacted legislation intended to limit the actions of medical debt collectors. Considering more than 40 percent of Maine residents have medical debt, the new law is being welcomed with open arms by consumers in the Pine Tree State.

The law, titled “An Act to Prohibit Unfair Practices Related to the Collection of Medical Debt,” contains a series of amendments to Maine’s Fair Debt Collection Practices Act. The amendments address fees and interest, unfair practices and misleading representations and provides a formal definition of “medical debt.” The Maine legislature considered multiple iterations of the legislation before agreeing to a compromise bill that was ultimately signed into law.

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Several practices are now considered “unfair” under the new Maine medical debt laws

One of the more notable changes to medical debt collection, under the new law, is the prohibition on medical debt collectors to charge interest or fees. Specifically, the amendments state that it is considered an unfair practice to charge any interest on debt or fee for collecting debt “that the debt collector knows is medical debt.” This is an indicator that charging a fee or interest on medical debt will be deemed a false or misleading representation.

It will also be considered an unfair practice for a debt collector to pursue litigation against a consumer without first providing notice to the consumer “that litigation may not be pursued when the debt collector or collection agency knows the consumer’s household income is not more than 300 percent of the federal poverty guidelines.” Furthermore, a debt collector, or debt collection agency, is required to wait 30 days for a consumer to provide evidence of household income before initiating litigation.

In addition, the amendments establish that it is considered a “false, deceptive or misleading representation” for a debt collector, or collection agency, to imply they will pursue litigation against a consumer in an effort to compel payment of an outstanding medical debt, or in an effort to obtain information about a consumer in relation to an attempt to collect medical debt.

What is the definition of medical debt under this new Maine law?

Another notable aspect of the new law is the definition of "medical debt." Specifically, “medical debt” is defined to mean “debt arising from health care services, including dental services, or health care goods, including products, devices, durable medical equipment and prescription drugs.”

Not included in this definition is medical debt “arising from services provided by a veterinarian; debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered solely for the payment of health care services; debt charged to a home equity or general purpose line of credit; or secured debt.” The scope of this definition is notable since it effectively excludes medical debt charged to credit cards (i.e., credit cards that are not medical credit cards) that are not specifically for health care services. In addition, the law does not prohibit credit reporting medical debt, nor does it restrict the sale of medical debt.

The statute of limitations on medical debt still applies

In addition to the new restrictions on certain debt collection practices in Maine, it is important to still be mindful of other ways you can respond to collection agencies regarding a medical debt. For example, if you are contacted about a medical debt that is many years old, you may be able to raise the statute of limitations on medical debt as a basis for not taking further action. In Maine, the statute of limitations on debt is six years after the date of the debtor's last activity on the debt

What to do if you are sued for medical debt in Maine

Under the new law, the procedural requirements that debt collectors must meet before they can file a legal action to collect on an unpaid medical debt are now more specific.

As mentioned earlier, the new law restricts debt collectors from pursuing litigation until they’ve taken provided written notice that litigation may not be pursued when the debt collector, or collection agency, possesses knowledge that the consumer’s household income is not more than 300 percent of the federal poverty guidelines. In effect, if a debt collector files a collection lawsuit before sending out this notice, you may be able to raise this procedural error as a potential defense.

If a debt collector, or debt collection agency, sends a household income notice, you have 30 days to respond and provide evidence of household income. According to the new law, if your household income is less than 300 percent of the federal poverty guidelines, then a debt collector may actually be prohibited from filing a collection lawsuit.

If you’ve been sued for medical debt in Maine, the first step you should take is to respond. This will help you prevent a default judgment and give you time to work out a settlement.

Draft and file an Answer to a summons for debt in Maine.

Verify you actually owe the medical debt

Collection agencies can pursue litigation against you, but they bear the burden of proving that the medical debt is actually yours. This is why it is recommended that you request the debt collector provide the following information:

  • The full name of the original creditor
  • The amount of the original debt
  • The date of the debt
  • The amount covered by your insurance provider, if applicable
  • Any payment history, if applicable
  • The outstanding debt
  • Any other information that may directly link you to the debt

In some instances, requesting debt verification will ultimately result in the debt collector backing off. Nevertheless, if they can prove that the medical debt is yours, you’ll at least know what you’re dealing with, in a financial sense.

Consider using these tips to validate your debt from SoloSuit.

Settle your medical debt for less

If the medical debt is, in fact, your (or you charged medical bills to credit cards considered not to be medical credit cards), then it may make sense to try and negotiate an amicable resolution with the debt collector. You may actually be able to settle your unpaid medical debt for less than what you owe. For example, many debt collectors are open to accepting a lower payment amount rather than go through expensive and time-consuming legal proceedings.

You could start by offering to pay, let’s say, 60 percent of the total amount. This could help get the ball rolling on settlement negotiations. Hopefully, you and the debt collector can eventually reach an agreeable outcome.

SoloSuit can help you here, as well. SoloSettle allows you to negotiate with debt collectors without dealing with them directly, and you only pay once you reach a final settlement.

Key takeaways

Individuals and debt collectors in Maine need to be mindful of this new law since it makes collecting medical debt less viable by prohibiting interest and fees. Here are some of the rules the new law establishes:

  • Debt collectors cannot collect interest on medical debt.
  • Debt collectors must determine whether litigation can be pursued by sending notice to, and receiving evidence from, consumers concerning their household income.
  • Debt collectors must verify household income is likely to require modifications to boilerplate debt collection letters, in addition to new procedures and collector training.

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