Thirty billion dollars of unpayable medical debt, belonging to an estimated 20 million families, to be erased 

Queens, NY – April 4, 2025 – National nonprofit Undue Medical Debt (Undue) has acquired all qualifying, outstanding medical debt from Pendrick Capital Partners, a third-party debt buyer, totaling $30 billion of medical debt belonging to an estimated 20 million individuals across the U.S. living at or below 400% of the federal poverty level or for whom medical debt is 5% or more of their annual income. If not for Undue, these medical debts would have been sold to a for-profit collection agency and patients would be pursued for the outstanding balances and potentially end up on payment plans. This partnership allows Pendrick to exit the medical debt collection space and removes a substantial percentage of medical debt from the shoulders of families across the country.  

With an estimated $220 billion of medical debt in the U.S., per KFF, this purchase will make a sizeable dent in the total outstanding medical debt (that said, this estimate of total medical debt is likely a significant undercount given technical limitations on assessing the scope of this crisis; Gallup reported an additional $74 billion in medical just last year). Since being founded in 2014, this acquisition notwithstanding, Undue has erased $15 billion of medical debt, meaning this purchase represents a 200% increase in impact.  

Undue leveraged the scale of this purchase to negotiate a deal on the transaction (which is even more impactful than the nonprofit’s standard ROI of one donated dollar erasing an average of $100 of medical debt); Undue’s payment is at a substantial discount, relative to the industry standard, to acquire these debts from Pendrick (i.e. less than a penny on the dollar). Medical debts over 7-years-old have been donated by Pendrick.  

Undue is using funding from government partners (the nonprofit is working with over 20 cities, counties and/or states), existing donors like philanthropist MacKenzie Scott and additional fundraising efforts it will be launching to support this historic purchase with payments due every quarter to Pendrick over the next 18 months.  

“This deal underscores that the way we finance healthcare in the U.S. is fundamentally broken. Patients are increasingly left on the hook for balances they cannot afford just because they got sick, were in an accident or were born with a chronic condition,” shares Undue Medical Debt president and CEO Allison Sesso. “Undue’s intervention is not a silver bullet, and much work remains to create an equitable and comprehensive healthcare financing ecosystem, but through this effort with Pendrick, we are stopping collections on a monumental number of medical debts and helping tens of millions of families breathe a little easier by mitigating the emotional and financial burdens of medical debt.”  

Given the scope of this effort, Undue anticipates it taking up to 1.5-2 years to inform all 20 million patients of debt relief. In the meantime, any acquired medical debts reported to credit bureaus have been removed and all collection actions have ceased. Due to the volume of accounts and due diligence associated with communicating debt relief, the only way someone can confirm their debt has been erased is by receiving an Undue branded envelope in the mail. Any patient with an outstanding balance owned by Pendrick who is currently at 400% or below the federal poverty level (or with medical debt that’s 5% or more of annual income) can rest assured their debt is erased.  

Thanks to advocacy from nonprofits, community-based organizations, policy makers and donors, among others, medical debt is increasingly understood as a debt of necessity that shouldn’t reflect on a patient’s character or credit worthiness. Put simply, providers like hospitals – and collection agencies – understand that medical debt collection is no longer collectable as families struggle to make ends meet and out-of-pocket payment expectations through insurance increase beyond people’s means.  

Last year the Consumer Financial Protection Bureau (CFPB) proposed a rule to remove all medical debts from credit reports and the big three credit institutions all decided independently to remove medical debts under $500 from credit reports and give patients more time to pay off past-due medical debts. The future of the CFPB is now uncertain and potential federal cuts to Medicaid and ACA plan subsidies suggest that even more medical debt will be created in the near future.  

Quick Facts: 

• All payment plans with Pendrick have ended and unpaid balances for those 400% or below the federal poverty level are now erased.  
• Sixty percent of this medical debt relief is in non-Medicaid expansion states. 
• As of now, all analyses are estimates as Undue must parse through the accounts of 20 million people in addition to maintaining its normal course of business.  
• All qualifying accounts are in the nonprofit’s possession but given the sheer size of this deal, payments to Pendrick will be made over time.  
• The average amount erased is estimated as $1,100 per patient with the highest debt relieved being over $350k.  
• Top states with the highest amount of debt in this portfolio are Texas, Florida, California, Georgia and Oklahoma.  

While this supports the nonprofit’s mission at an unprecedented level, this type of largescale purchase is not the norm—given the associated capital needed and administrative complexity—and Undue will continue its vital work powered by the remarkable generosity of private and grassroots supporters to carry out its core model.