Medical debt and credit card debt in Georgia

Medical debt and credit card debt continue to plague the country, including those who reside in Georgia. Both can negatively impact one's finances, but in distinctly different ways.

Medical debt and credit card debt continue to plague the country. Unfortunately, the residents of Georgia are not immune to these struggles. A recent article in USA Today reports that Georgia has some of the highest rates of credit card debt in the country. The state ranked number 7 with an average balance per credit card of $1,677.

NerdWallet, a personal finance website, also reported its research on the average national credit card debt and found the average household owes $7,283 on all credit cards held by the family. This number changes when the researchers focus on households that typically carry debt on credit cards. Families who carry a balance on their cards have an average credit card debt of $15,611.

Although these balances are high and may seem unmanageable, NerdWallet also reports that medical bills continue to outpace credit card debt. Within this report, it was found that approximately 20 percent of adults in the United States are struggling to make payments on medical bills.

How medical debt and credit card debt impact your credit score

Although medical debt and credit card debt are top causes of debt in the United States, they impact finances in distinctly different ways:

  • Budget. Although credit card bills are subject to varying interest rates, card holders generally budget and approximate monthly payments. This is not always true with medical debt. Accidents and health issues are often unpredictable, and the medical care needed to recover can vary. This can lead to large bills in a matter of days.
  • Collection. Collection agencies tend to receive a higher number of payments for medical bills then credit card bills. Approximately half of the bills sent to third party collection agencies are medical bills. Americans are estimated to pay three times more in medical debt through collection agencies than bank and credit card debt combined.
  • Impact. Both medical debt and credit card debt negatively impact one's credit score. The Washington Post reports one in five Americans have medical debt on their credit reports, which translates to 43 million individuals. Although a higher number of medical bills are sent to collection, FICO places a higher weight on credit card bills in the calculation used to determine one's credit report score. As a result, credit card debt is more likely to have a larger negative impact on an individual's credit score.

These are just a few of the issues that can arise when attempting to manage debt associated with medical and credit card bills. Individuals that find these issues frustrating and unmanageable are not alone and many find relief by filing bankruptcy. According to the United States Courts there were 24,781 individuals filing Chapter 7 bankruptcy and 28,500 individuals filing Chapter 13 bankruptcy in Georgia from September 30, 2013, through September 30, 2014.

Legal counsel can help

Individuals struggling to meet financial obligations are wise to seek the counsel of an experienced debt relief attorney. A legal professional can review your unique situation and discuss the benefits of filing bankruptcy for a fresh financial start.

Keywords: bankruptcy