Medical debt is one of the leading causes of financial distress in the U.S., contributing to over 60% of bankruptcies. Unlike credit card debt and personal loans, it is often the result of an unexpected illness or an emergency.
If left unresolved, medical debt can significantly impact your financial future in ways you never expected.
Damaged Credit Score
Unpaid bills, including medical bills, can eventually be sent to collections. This can appear on your credit report and lower your credit score. A lower credit score can affect your ability to:
- Qualify for a mortgage
- Rent an apartment
- Access new lines of credit
Stress on Housing Ability
If you are already struggling to meet your mortgage payments, additional medical debt can push you closer to foreclosure. Medical debt can interfere with:
- Mortgage approvals
- Rental applications
- Foreclosure prevention options
Collection Lawsuits and Judgements
If medical bills are not paid, collection agencies and even medical providers may take legal action. You may face:
- Court judgements
- Debt collection lawsuits
- Wage garnishment
Options are Available
While medical debt can be overwhelming, it does not mean that you will be living in financial ruin forever. In many cases, medical debt is unsecured debt, meaning that it can be dischargeable through Chapter 7 or reorganized under Chapter 13 bankruptcy.
Depending on your circumstances, your options can include:
- Negotiating the balance
- Debt settlement
- Setting up structured repayment plans
Financial setbacks caused by medical emergencies are common, and our team members at Todd Cushner & Associates are here to assist. If you are facing mounting medical debt, contact us today at (914) 600-5502 for a free consultation.
