For example: If you were to take $10,000 out of your 401k or IRA to pay off your medical debt, you would pay $2,500 or so in taxes (Depending on your tax bracket), plus an additional $1,000 in penalties. That means you will only have $6,500 to put toward the debt. Not a smart way to use your money dude!

These options may sound good at the time when you’re deep in debt and you want to get the hospital paid off, but thinking with a clear head and using some good ole’ common sense will help to ensure that you don’t exchange one kind of debt for other, worse kinds of debt that can be even harder to overcome.

There are so many ways to make your situation with medical debt much worse if you don’t know all the facts or are not thinking with a clear head because you’re stressed out and worried. Avoiding these four mistakes can save you some serious money and heartache that you just don’t need when you’re having medical problems and dealing with the mountain of medical debt that can go along with it.

In the next post I’ll flip to the other side and let you know just what you should be doing when it comes to getting your medical debt paid off as easily and quickly as you possibly can.

Until next time…

Have you had any experience with medical debt? Any more things that should be avoided? Let me know in the comments.

Article originally published on Celebrating Financial Freedom. Used with permission.

Dr. Jason Cabler is a Christian personal finance blogger, author, and speaker.  He teaches how to get out of debt and live a debt free lifestyle through his Celebrating Financial Freedom blog and self study course.  His book How to Budget- The Quick and Easy Guide to Making a Budget That Works is now available.  He can be reached for interviews or  speaking engagements by email ( and can be found on Twitter, Facebook, and Google +.

Publication date: February 13, 2013