When medical bills lead to deep debt, tough choices follow

Credit Smart
Credit Smart columnist Susan C. Keating
Susan C. Keating is the president and chief executive officer of the National Foundation for Credit Counseling. Prior to joining the NFCC, Keating spent 29 years in financial services. She was the highest ranking female CEO of a U.S. bank holding company, serving as president and chief executive of Allfirst Financial Inc., the largest U.S. holding of AIB Group. She currently serves on Bank of America's National Consumer Advisory Council and is a board member of the Council on Accreditation. Keating also participates in the Financial Regulation Reform Collaborative, a nonpartisan group committed to finding solutions for reforming financial services regulation.

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Dear Credit Smart,
My husband was the main provider and in the last two years has had many medical problems and cannot work. I had a few credit cards that I cannot pay now due to him not working and me having to try to pay the important bills such as electric and groceries. I had such good credit and now because of this hardship my credit score has dropped tremendously. I worry constantly and it is affecting my health and overall outlook on life. Is there any information you can give me to help with this situation? Please, I need any help I can get. Thank you in advance. – Debra

Answer Dear Debra,
Medical issues can snowball and affect more than just the health of the person with the problems, as your question unfortunately demonstrates. The stress and worry of what do now is causing you to have health problems that you did not have before.

I want you to know that you have done the right thing by prioritizing your expenses. Having a roof over your head and food to eat should always be your first concern. Too often, we hear of people who are so worried about their credit rating that they have not done what you did, instead opting to pay debts before taking care of themselves. While it is admirable to want to continue to fulfill financial obligations, it should never come at the expense of  basic necessities like food and shelter.

If you have not done so already, I would suggest you look into Social Security disability benefits for your husband. These benefits are generally paid when a person, who has been working and paying into the Social Security system, is unable to do any substantial work because of a medical condition. Also, the condition must have lasted or be expected to last at least one year. You say in your question that he has been unable to work for the last two years. I can’t say whether he would qualify and it can be a lengthy process, but I think it is certainly worth investigating. The Social Services Administration has more information about benefits for people with disabilities.

One thing to note is that if your husband is already receiving disability benefits from an employer or another source, he probably would not qualify for additional Social Security benefits. I can’t be sure from your question whether he is receiving any income or not at this time, but I do know that additional income of any kind would certainly help your situation.

I would also suggest that you contact a qualified nonprofit credit counselor to go over your entire financial situation to see what your options are for taking care of your credit card debt. Even though you are doing the right thing to prioritize what you are paying, this debt will not go away on its own. A good counselor will cover all of your options and help you decide what will work best for you. I know you probably don’t want to hear this, but it may be that a bankruptcy is in your future. If that is the case, you will need to speak with an attorney. Should you decide that this is the best course, you will still have to work with a credit counseling agency to receive the required bankruptcy education and certificates and you may be a little ahead in the process by talking with an agency first. You can find an agency to work with through the National Foundation for Credit Counseling. The Federal Trade Commission has good advice on choosing a credit counselor.

Remember to always use your credit smarts!

See related: 8 steps to picking a credit counselor

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Updated: 11-23-2017