My husband and I are about 20,000 in debt. He had a kidney transplant 2 years ago, which put us in the hole and now we have to pay off his medical bills and even just to copays on his anti rejection drugs are killing us. We are barely keeping or heads above water.
I was hoping you would have some advice for me on how to get out of this very unfortunate situation. My husband and I are not currently behind payments, but each month it gets harder and I know it is just a matter of time before the floor drops out from under us. A series of unfortunate events got us into a situation we can’t get out of. A blown car engine, a broken oil tank, very expensive oil prices and a transplant surgery. Along with the cost of medical care and medications we are in a bind.
We currently do not have any available credit and all of our credit cards are closed because they were raising the interest rates so high. If something were to happen to either of us or my 12 year old daughter we would just be completely and utterly for lack of a better word..screwed. We do not have any savings left eith er. Our 401K’s tanked with the market last year…I just don’t know what to do…Please help
Thank you for writing me for help.
The good news is you’ve spotted this situation with some time to spare. It’s great you are trying to take action before it all really turns bad.
The first order of business is we need to build you an emergency fund. As you observed, if something unexpected were to happen you would be ‘screwed’ without it.
If you have any funds leftover each month you could start putting those into a savings account. If you think you should have money leftover but don’t know where it is going then build yourself a savings plan by following the section that begins on page 81 of my free book “How to Eliminate Your Debt Like a Pro”.
The worst case scenario would be you don’t have any spare money to start saving and you are living paycheck to paycheck. In that case the only solutions are going to be to increase income, to reduce expenses, a combination of the both of those, or to look towards more drastic intervention like bankruptcy.
While I called bankruptcy drastic, it might not be that crazy. If there is no opportunity to increase income, and your expenses are already cut back then bankruptcy would be a smart thing to consider. It would also be a responsible move as well. The initial reaction from people is that bankruptcy is not a responsible move. But let me ask you, is it more responsible to take action to get yourself in a position to be able to create a financial safety net to protect your child and family, or to continue on the path you are on?
Let me know what you decide to do from reading this answer. I’m excited that there might be some better times ahead for you.