Medical Debt Forgiveness: What Are Your Options?

Medical Debt Forgiveness: What Are Your Options?

If you’re struggling with large hospital bills or unpaid medical collections, you’re not alone. Over 100 million Americans have medical debt, and many are unaware that there are programs that can forgive or eliminate medical debt entirely — even if it’s already gone to collections.

In this comprehensive guide, we’ll explore the different ways to get medical debt forgiven in 2025, including nonprofit aid, hospital financial assistance, government protections, and more.

What Is Medical Debt Forgiveness?

Medical debt forgiveness is the cancellation or removal of unpaid medical bills. This can happen through a hospital’s charity care program, a nonprofit organization that buys and erases debt, or through legal protections that limit collection practices.

Depending on your income, location, and the type of medical provider, you may be able to erase part — or all — of your healthcare-related debt.

Top Ways to Get Medical Debt Forgiven in 2025

1. Hospital Financial Assistance Programs

Many nonprofit hospitals are required to offer financial assistance — also known as “charity care” — to patients who cannot afford their medical bills.

Under IRS rules (501(r)), nonprofit hospitals must:

  • Have a written Financial Assistance Policy (FAP)
  • Provide free or discounted care based on income
  • Make the application process accessible

Eligibility Example:

  • 100% debt forgiveness if income is below 200% of the Federal Poverty Level (FPL)
  • Partial forgiveness up to 400% of FPL

Visit the hospital’s billing department or website to apply. Common providers offering charity care include:

  • Mayo Clinic
  • Atrium Health
  • Intermountain Health
  • NY-Presbyterian

2. Nonprofit Organizations That Forgive Medical Debt

Some charities specialize in buying and canceling medical debt for low-income individuals. The most well-known is:

✔️ RIP Medical Debt

This nonprofit uses donations to buy bundled medical debt portfolios for pennies on the dollar — and then erases them entirely without asking patients to pay anything.

Apply or learn more at ripmedicaldebt.org

To qualify: You typically must earn less than 400% of FPL or have debt that’s a significant portion of your income.

3. Medicaid and State-Based Forgiveness Rules

If you were eligible for Medicaid at the time of service but were not enrolled, some hospitals or state programs may retroactively apply coverage or forgive the bill.

States like California, Illinois, and New York have passed laws that expand protections for low-income patients and restrict aggressive collections.

4. Medical Debt Forgiveness After Bankruptcy

Medical debt is usually considered dischargeable under Chapter 7 bankruptcy. This means it can be completely wiped out — but it’s a last resort, as it affects your credit for up to 10 years.

If your debt is over $10,000 and no other forgiveness options are available, speak to a bankruptcy attorney about your eligibility.

5. “Pay for Delete” Agreements

If your debt is already in collections, you can try negotiating a settlement where the collector agrees to remove the account from your credit report once it’s paid — this is called a “pay for delete.”

While credit bureaus discourage this practice, some agencies still agree to it if you negotiate directly. Always get the agreement in writing before making a payment.

Can You Dispute Medical Debt to Have It Removed?

Yes. If the debt is incorrect, paid, under $500, or less than one year old, it may be ineligible for credit reporting. You can dispute medical debt with credit bureaus to have it removed.

  • Go to AnnualCreditReport.com to check your credit
  • Dispute any medical collections that are inaccurate or outdated
  • Provide proof of insurance payments, charity care eligibility, or payment confirmation

Your Legal Protections in 2025

Thanks to recent federal changes, you have stronger protections than ever:

  • Paid medical debt no longer appears on your credit report
  • Debts under $500 cannot be reported to credit agencies
  • One-year waiting period: Collectors must wait 1 year before reporting unpaid medical debt
  • No lawsuits or collections allowed until eligibility for financial assistance has been assessed (for nonprofit hospitals)

If your hospital violated any of these protections, you may be able to file a complaint or even sue to get the debt removed.

How to Apply for Medical Debt Forgiveness

Step-by-Step:

  1. Request a copy of the hospital’s Financial Assistance Policy (FAP)
  2. Submit proof of income, household size, and hardship
  3. Ask about retroactive forgiveness (especially if you now qualify for Medicaid)
  4. Get documentation of approval or denial in writing
  5. If denied unfairly, file an appeal or complaint with your state attorney general or the CFPB

Organizations That Can Help

Common Myths About Medical Debt Forgiveness

  • Myth: “Only people with no income qualify.”
    Fact: Many programs help those earning up to 400–500% of FPL.
  • Myth: “Debt in collections can’t be forgiven.”
    Fact: Nonprofits and hospitals can still forgive collections debt.
  • Myth: “If I pay $5 a month, I’m safe.”
    Fact: That doesn’t stop collections or credit reporting. Forgiveness is a better option.

Conclusion: Don’t Let Medical Debt Control Your Life

Medical debt can be overwhelming, but you have options. From hospital assistance to nonprofit support to legal protections, you can fight back and often get debt reduced or erased entirely.

Take action today by exploring the resources above, contacting your hospital, and applying for medical debt forgiveness. You deserve peace of mind — and a fresh financial start.

Need help now? Start with Dollar For — a nonprofit that will guide you step-by-step through your forgiveness application.

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