If you are concerned about medical debts that you may need to pay (whether it’s for yourself or for someone you are financially responsible for), a new law in New Jersey could be very helpful to you. It’s called the “Louisa Carman Medical Debt Relief Act.”
Effective July 22, 2025, a health care service provider that issues a bill to a patient or legally responsible individual cannot try to force collection for 120 days after the issuance of that bill. Also, the service must first offer the patient a “reasonable payment plan” which is a monthly payment plan of 6 to 60 months or more that does not exceed 3% of the income of the patient or legally responsible individual, provided that this person timely discloses income to the creditor. There must be a 60-day grace period for late payments, and the interest rate on payment plans cannot exceed 3%. Participating in the reasonable payment plan in good standing means that a collection action cannot commence against the payor.
“Health care service” broadly includes all medical and nursing care which presumably includes nursing home services and medical services provided in assisted living and other residential settings. The law applies to all licensed health professionals and all facilities that are licensed by the Department of Health. The law even applies in cases where the provider sold the debt to another debt collector.
If you receive a health care bill and you need to make a payment plan, you need to quickly send back your timely request for a “reasonable payment plan,” supported by disclosure of the debtors’ income. Be sure to get those payment plans signed and in writing to forestall other legal action.
Click here Louisa Carman Act to see our slides explaining more about this new law. The law might be very helpful to people with inadequate insurance coverage.
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