My Father Has End-State Renal Disease. Should He File Bankruptcy? – Nicole

“Dear Steve,

My dad has had a great paying job for years but has recently gone through a health situation that has rendered him unable to work at this point. He has end stage renal disease and other problems affecting his heart. He has $61,000 in credit card debt. When he was first hospitalized I called every creditor hoping that they would suspend payments for 2-3 months until we figured out the severity of his situation (my dad has always been very proud of his credit score) and could come up with a repayment plan. Well, of course, no one would help.

My father has a line of credit against his house and he owns a car. The house is worth $80,000 and he owes $62,000. I want to make sure that he will not lose his house. The lawyer I spoke with said he would not because he owes too much on it. All his taxes are paid for 2010 (property and school).

When should I file for him…..at the end of this year or beginning of next and how will this affect his tax return?


Dear Nicole,

I’m so sorry to hear about your father’s illness and his medical situation.

When you say he has “end-statge” renal disease I’m not clear if the prognosis is that he may not live much longer. If the estimate is that he may pass away in the next six months then he may not have to do anything. His debt will end with his estate and if the house is held in joint tenancy the other party will take possession of the property.

However, if you wanted to eliminate the stress from his end days by discharging this debt with bankruptcy then the question is really if he was expecting a big tax refund or not. But that’s kind of immaterial since if his days are limited you’d want to give him the best opportunity to put the debt behind him now and give him the best chance to enjoy what time he has left. In that case he should file bankruptcy tomorrow.

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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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