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Using Credit Cards or Retirement to Pay Medical Bills is a Bad Idea

Categories: Chapter 7

Now, I’m no math expert; that’s why I went to law school.  The other day, I heard someone mention that they were tired of the medical bills they were receiving and they were just going to pay those medical bills with credit cards.  Unbelievable.  You’re of above level intelligence if you’re reading this post because you can turn on your computer, log onto the internet and search for information about relevant subjects that interest you; right?  Then, what makes you think that using your credit card, with an interest rate of about 10% or more, to pay off a debt with 0% interest is a good idea?  Am I missing something here?

Too often people are led to the wrong conclusions about money and can’t figure out how they got  themselves into the messes they created.  Stop and think about it.  It “feels” good to pay off a debt.  What’s missing is that more debt is being created to “feel” good momentarily.  Don’t let your emotions get the best of you when making financial decisions.

Another financial mistake would be to pay those medical bills with your retirement accounts; 401k, 403b, IRA, or Roth IRA account.  I don’t care how you’re saving for retirement, that money is not for medical bills now; it’s for your future.  Never, and I emphasize NEVER, touch your retirement accounts until you retire.

Medical bills and credit card debts are always dischargeable in bankruptcy and your retirement accounts are safe from being taken by the trustee to pay those debts.  So, if the Courts can’t touch your money to pay your bills, why should you?  

 

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