Colorado bill would bar debt collectors from seizing wages, homes over medical debt

Colorado Consumer Health Initiative says at least 700,000 Coloradans are in collections due to unpaid medical bills. Under state law, debt collectors can seize their wages and even put a lien on their house.

“It’s just pushing people over the edge,” says Democratic state Rep. Junie Joseph, who says the medical bills are personal to her. These types of bills affected her as the daughter of a single mother and as a college student. 

“They were constantly calling me, ‘Hey, Junie, you need to pay $1,000 here or $2,000 there,” Joseph explained. 

Joseph and Democratic state Rep. Javier Mabrey are proposing legislation that bars providers from collecting medical debt by garnishing wages, seizing assets below $30,000, or placing a lien on a person’s primary home.

“You should not be at risk of losing your home just because yo get sick in this country, Mabrey told CBS Colorado. 

Rocio Leal is among thousands of Coloradans in debt due to medical bills. She says she had a good job with insurance and thought she was financially secure. Then, her son got sick.

“When he was a toddler, around three, he had to have emergency surgery,” Leal told CBS Colorado. 

Leal was still paying the hospital that delivered her son when another hospital began billing her for the surgery. Despite being insured, she says she owed $7,000. When Leal couldn’t pay, she says, the hospitals began garnishing her wages.

“There was so many times my electricity was shut off,” Leal said. “There was times I was almost facing eviction.”

Desperate, Leal took out high-interest payday loans. Twenty years later, she’s still paying them off.

“Just for being sick,” she said. 

Mabrey says UCHealth is the biggest offender regarding wage garnishment.

But the health system insists it only garnishes wages as a last resort after repeatedly contacting patients, making sure they’re not eligible for assistance, and offering zero interest payment plans. 

UCHealth says it provided more than $760 million in uncompensated care in 2025 alone.

The Colorado Hospital Association — which opposes the bill — says state laws require all hospitals to screen patients for discounted care, wait six months before garnishing wages, and provide 30 days’ notice. It’s also barred from reporting medical debt to credit bureaus and required to erase debt in some cases.

The Hospital Association says the bill could cause some rural hospitals to close. But Mabrey says other states have similar laws and hospitals are still in business.

The bill goes before the House Health and Human Services Committee Tuesday.  

Leal, who is a diabetic, says she still worries about going in debt every time she goes to the doctor. 

“I don’t want anybody else to go through what I’ve been through,” Leal said.