Medical Debt Relief in Maryland Chapter 7: New Protections

 Posted on November 07, 2025 in Chapter 7 Bankruptcy

As of 2024, 100 million Americans owed $220 billion in medical debt. This level of debt can have devastating impacts on the lives of these consumers, leaving them unable to borrow money for a home or car, and even being rejected for jobs they are otherwise qualified for due to poor credit reports. As many as 66.5 percent of all Americans who file for bankruptcy (550,000 per year) say that medical bills are the primary cause.

Maryland lawmakers are finally beginning to acknowledge the extent of the burden of medical debt. In 2024, the state’s new Hospital Patient Financial Protections law (Health-Gen Section 19-214.3) began restricting how hospitals and affiliated collectors can pursue unpaid medical bills. Maryland residents considering Chapter 7 bankruptcy should be aware that this law changes more than just billing practices.

The new law can directly impact how collection lawsuits proceed and whether creditors must stop aggressive recovery actions. To understand how these state-level patient protections intersect with bankruptcy discharge rules, speak to a knowledgeable Charles County, MD Chapter 7 bankruptcy lawyer.

What Changed with the Maryland Hospital Billing Law?

The Maryland Hospital Billing law changed many things associated with how medical debt is collected in the state, including:

• Hospitals are required to screen patients for financial assistance eligibility prior to collections.
• A new sliding scale provides financial assistance to those whose family income falls between 200 percent and 500 percent of the Federal Poverty Level.
• Hospitals must provide refunds to patients who are eligible for free care and have already paid.
• Hospitals must offer repayment plans to eligible patients.
• Patients have 240 days after receiving a bill to apply for financial assistance.
• Medical debt now includes co-payments, deductibles, and co-insurance.
• Hospitals are prohibited from suing patients for medical debt less than $500.
• Hospitals cannot charge interest on unpaid bills prior to obtaining a court judgment.
• Hospitals cannot report negative information to credit bureaus if the patient was eligible for free or reduced-cost care or is in the appeals process.

How Does the Maryland Hospital Billing Law Intersect with Chapter 7 Bankruptcy?

The new law regulates how hospitals and collection entities can pursue medical debt before a bankruptcy filing, but does not prevent the debt from being discharged during Chapter 7 bankruptcy as an unsecured debt. In bankruptcy court, medical debt is considered an unsecured debt because it is not tied to specific collateral, like a house or a car.

Unsecured debts are dischargeable during the bankruptcy process, meaning the debtor is no longer legally obligated to pay them once the bankruptcy process is complete. If anything, the new state laws may offer patients more time and options before resorting to bankruptcy; however, if bankruptcy is filed, the federal bankruptcy discharges unsecured debts.

The new law does ensure that hospitals may no longer have standing to sue or report certain debts before a consumer files for bankruptcy. Hospitals that violate discharge injunctions can now face additional exposure under the new state law.

Finally, trustees can review improper hospital collection actions as avoidable preferences. Ultimately, debtors in Maryland have gained more options for managing medical debt and creditor harassment while retaining Chapter 7 bankruptcy protections related to medical debt.

Contact a Bowie, MD Consumer Bankruptcy Lawyer

Maryland’s hospital billing reforms created a second layer of medical debt protection for struggling consumers. When combined with Chapter 7 bankruptcy, these rules allow debtors to eliminate old medical bills and hold hospitals accountable for abusive collection practices.

A Charles County, MD Chapter 7 bankruptcy attorney from Bloc One Services, LLC can help you wipe out your medical debts and begin rebuilding your credit. Attorney Blocton provides her local community with high-quality legal services at a fair and reasonable price as "The People’s Attorney." Call 240-200-0076 to schedule your free initial 30-minute consultation.