Medical Debt, Credit Card Debt and No Retirement Saved – Lisa


Dear Steve,

Stayed home with kids for 9 years, and just went back to work. We have had medical issues and just not made enough money. We have racked up some credit card bills $50,000 and $40k in student loans and our house is 250K, and we have two cars. We have tried paying down the cards for years, feels like we are not getting anywhere.

I am trying to decide if we file for bankruptcy. I have my kids college to think about, and we have no money saved for our retirement.



Dear Lisa,

I’m all about letting the math tell you what the answer is. In this case it would appear you have been living a bit beyond your means with overflow expenses landing on the credit cards.

So unless you are able to either increase your income, reduce your expenses, or a bit of both; it is unreasonable to expect you are going to be able to make payments and get out from under this.

On top of this the most frightening thing you said was you have no money saved for retirement. You should look at What Repaying Your Debt Will Cost You in Retirement – Calculator.

Life is full of second chances and the opportunity to do better the next time around. However the single component you never get a second chance at is time. Once it is gone it is gone forever.

So bankruptcy is absolutely an appropriate solution to consider. It is often the fastest way out of debt for the lowest cost. And more importantly it will give you the opportunity to get back to saving as fast as possible so you can take advantage of the multiplying power of time.

Now, all that being said, following your bankruptcy you will absolutely need to find a way to get your life to fit within your income. But in my experience, filing bankruptcy is a fantastic teachable moment and the vast majority of bankruptcy filers never file bankruptcy again.

See also  Apathy and Ignorance Killed Your Happiness and Retirement. You're Welcome.

And if the medical debt is the result of having no health insurance, please get covered. Having medical insurance not only covers some costs but you also get reduced costs for a large number of medical expenses if your doctor or hospital accepts your insurance.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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