It happens to everyone eventually: You’re having a great day, and then an invoice arrives in the mail—an invoice for something that happened months or even years ago. A plumber’s bill, a hospital bill—any sort of business might suddenly think that you owe them money for something that you might not even remember very clearly.
When an invoice is that old, your first thought might be: Do I really have to pay this? It’s not unreasonable to expect and assume that businesses will bill you in a timely fashion, and it’s perfectly natural to forget all about a debt if an invoice doesn’t arrive until years later. On the other hand, there’s usually no legal requirement that bills be sent out in a timely fashion—so businesses can absolutely bill your months or even years after the fact. If it’s a medical debt, there’s the added confusion of insurance coverage and the challenge of understanding the bill in the first place. Here’s how to tell if you really need to pay that old invoice.
Check your history
It’s not fun, but it’s time to dive into those old bank and credit card statements. If you don’t have hardcopies on file, banks and credit card companies keep your old statements on their servers for a period of time (typically about seven years), and you can usually contact them to order old statements if you have to. Keep in mind there may be fees involved, especially if you’re no longer a customer.
If you find that you’ve already paid the bill, gather your details (check number, date of payment, any receipt you might still have) and write to the company that sent you the invoice. Tell them you don’t acknowledge the debt and explain that it’s already been paid.
Check the statute
If you have no record of paying the debt, or question whether it’s a legitimate debt at all, your next step is to check the statute of limitations on debt collections in your state. These vary but are typically about six years. Most debts are considered to be “time-barred” at a certain point, and that “certain point” is what the statute of limitations defines. So if the statute of limitations is six years in your area, after six years that debt becomes time-barred.
However, this is tricky: You still owe a time-barred debt, but you no longer have a legal obligation to pay it. The business or person you owe it to can no longer sue you, but they can request that you pay it (you can formally request that they stop contacting you about it, however). The bottom line: If the debt has aged out of the statute of limitations and become time-barred, legally you don’t have to pay it. Whether you should pay it or not is up to you and your conscience—but keep in mind that time-barred debt will still show up on your credit reports and have a negative impact on your credit score for up to seven years.
Check your insurance
If the debt in question is medical in nature (or involves other insurance in some way), you’ll want to contact your insurer (even if they no longer cover you, for example, if you’ve changed jobs in the meantime). You might be dealing with one of these scenarios:
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Balance billing: They may be attempting to get you to pay the balance of your bill not covered by your insurance. Call your insurer (even if you’re not with them anymore) and find out their policy—many insurers forbid balance billing in their contracts with hospitals and healthcare providers. Depending on the type of care you received and the laws in your area, the provider may not be legally allowed to engage in balance billing at all, so it’s worth doing a little research.
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Recouping their mistake: The provider may have neglected to submit the invoice to your insurer in a timely fashion, and now want you to pay the whole thing due to their mistake. Check with your insurer to find out if the bill was ever submitted, and that it was submitted correctly, and within the time limit (typically about 90 days). If not, check if it can still be submitted to them. If your healthcare provider is in your insurer’s network, chances are they have a contracted window of time to submit invoices, and if they failed to do so it is not your responsibility. Write your provider and ask to see proof they submitted the invoice to the insurer, and contact your insurer in the meantime and ask them to get involved.
If the bill was submitted to insurance properly and you are responsible for the amount, circle back to the statute of limitations: If the debt has become time-barred, you can legally ignore it.
