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How medical debt impacts finances

Having health insurance can help defray the cost of care, but it is not a guarantee that a South Carolina resident won't experience financial hardship. One poll of residents of another southern state found that 76 percent of those who drew down their savings or racked up credit card debt in the prior two years had health insurance. According to a national poll, 26 percent of respondents said that a medical debt caused a serious financial problem.

In addition to running out of savings, those who are unable to pay the bills may be forced to declare bankruptcy. This could have a significant impact on their credit scores, which may make it hard to buy a home or get other types of financing. Those who have been hit by large medical debts have also had to significantly alter their lifestyle to cope.

For some, it isn't possible to provide even the basic necessities such as food or housing. One elderly Florida woman says that she had to give up going out to lunch with friends or doing anything that involved spending money because of a large medical debt. After moving to the state, she found out that a specialist didn't take her insurance, which led to massive out-of-pocket expenses to cover.

Those who have large medical or other unsecured debts may wish to file for Chapter 7 bankruptcy. Although it will have an initial credit score impact, filing may eliminate some or all debts in a matter of weeks or months and eliminate collection calls and letters while the case is ongoing. Once the debts have been discharged, debtors are no longer obligated to pay them back. An attorney can explain the filing process and the eligibility requirements associated with this chapter.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
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Columbia, SC 29201

Phone: 803-764-1558
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