CHICAGO — Imagine having a crushing debt simply erased, without even asking.

Thousands of Cook County residents are finding out that their unpaid medical debts have been completely forgiven through a first-of-its-kind program paid for through the American Rescue Plan.

The weight of medical debt, which destroys credit scores, increases stress, and forces people to postpone other needed health care have all been forgiven for some.

“I am a person who has had a chronic illness for over ten years of my life,” 32-year-old Amy Medina-Quevedo, whose medical debt has been forgiven, said.

Medina-Quevedo lives with Type One Diabetes and the high cost of insulin forced her to “max out” her credit cards. A constant burden until she received a letter telling her the debt was all gone.

“When I did receive the letter from RIP medical debt, it brought me a sense of hope. It was very unexpected. It is a very nice program. I am glad that cook county is participating in this.”

The program, spearheaded by Cook Count Board President Toni Preckwinkle, uses federal funds from the American Rescue Plan to buy and forgive medical debt.

Cook County has successfully acquired and erased nearly $80 million in medical debt – and we spent only a fraction of that amount $800,000 to do it,” Preckwinkle said.

How it works?

When creditors — like banks, utilities, hospitals, and medical groups — can’t collect debts they’re owed, they try to recoup something, by taking all of the “bad debts” and packaging them into a portfolio and selling them as a bundle to debt buyers for pennies on the dollar.

“It is leveraging the for profit debt market for a charitable purpose, this is medical debt relief,” the President and CEO of RIP Medical Debt Allison Sesso said. “What we do is take the pricing that’s available in the for-profit debt market and we take one dollar and relieve as much as 100 dollars’ worth of debt.”

Cook County works with the non-profit “RIP Medical Debit,” which uses the federal funds to purchase the debt. Instead of trying to collect the debt, they just forgive it.

“I want to assure people that it is real,” Sesso said. You can’t apply for this, this is something that happens with no action. We get the debt from the hospitals, and we notify you that the debt has been relieved.”

There are eligibility requirements:

Medical debt must be 5% or more of your annual income

Individuals can’t make more than about $55,000

No application process

“Medical debt is the leading cause of bankruptcy in this country,” Preckwinkle said. “It also leads to poor credit, which undermines employment prospects, the ability to access affordable housing  and ultimately achieve upward mobility.”

It’s believed that Cook County is the first government body in the country to use the American Rescue Plan to help people with medical debt relief.