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Medical Bills • 3 minute read

The Long Term Effects Of Medical Debt

The Long Term Effects Of Medical Debt
By Mason Frenzel
Published by Ruby

Ruby's online tools and app helps you organize your medical bills and save money.

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When facing a large medical bill, your future financial wellbeing may not be the first thing on your mind. After all, if someone is treading water and just trying to stay afloat, they are probably not thinking about how sore their muscles will be tomorrow. In the case of medical debt, it’s not uncommon for people to be so overwhelmed that the easiest thing to do is ignore it. While that strategy may provide some temporary relief, it can result in serious financial harm down the road.

Here’s how:

A Chain Reaction

The best-laid plans can easily be derailed by medical bills. Imagine first-time parents forced to use the money they’d saved for a downpayment on a home to pay a delivery bill that was higher than expected. Or, an emergency surgery that requires a single mom to dip into her retirement savings. And sometimes even this isn’t enough.

In the situation that patients take too long to pay for treatment, the healthcare provider’s billing office often turns the debt over to a collection agency. This sets a number of factors into motion: First, you can expect a barrage of phone calls and emails from debt collectors. Secondly, when debt enters the hands of credit bureaus, your credit score takes a major hit. This can negatively affect your finances in the following ways:


Obtaining a loan becomes more difficult.

  • The medical debt you accrued signals to the bank that if they grant you a loan, you may struggle to pay it back. Without a loan, it is extremely challenging to purchase a home or a car.
  • Another possible scenario is that the bank offers you a loan with a hefty interest rate. If the interest payments are too high, you may not be able to justify taking out a loan in the first place.


A damaged credit score can impact your chances of being hired by a new employer.

  • According to AARP, if a company is choosing between two candidates they sometimes use credit scores as a deciding factor, viewing someone with good credit as potentially more reliable.
  • This is not to say that individuals with lower credit are less capable or qualified than those with healthier credit.


Take control.


If you receive a medical bill that you cannot afford, or even go into debt as a result, all hope is not lost. By developing a strategy on how to best pay off your debt, you can protect your finances. For information on how to negotiate your medical bill, apply for debt forgiveness, and more, click here. While tackling your debt head-on is a good starting point, there are a few things AARP advises against:


Prioritizing your medical debt above other forms of debt.

  • Medical debt will not damage your credit as much as missing payments on a car loan, per se.


Going into greater debt when trying to get out from under your medical debt.

  • Using a new credit card to pay off your medical debt can cause more damage, as credit card debt appears on your credit report sooner than medical debt.
Ask for help.

Sometimes simply asking for help is the best thing you can do, and that is why Ruby is here. We can assist you in relieving your current stress, while also protecting your financial future. By utilizing our soon to be released Medical Bill Manager app, you can create a specialized plan to pay off your debt, negotiate your bill, and even avoid overpaying by checking your bill for errors. For early access, click here!

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