I agree that most people aren't going to voluntarily go out and pick up some medical debt, but freed of their monthly payments they might decide to go back to school (student debt) or buy a larger house (mortgage debt). Or they might buy a new car on credit. For the same reasons that people today with no debt often choose to go into debt to fund a purchase, if we wiped out existing debt and didn't change anything else about the financial system I'd expect many people who'd just had their debts erased would also make purchases with new debt.