“Dear Steve,
My family and I have always lived a modest lifestyle. We built a modest home and only owe $75,000. We wait until a car is paid for before we ever think of buying something new. I can’t say that we have fallen into the norm of using credit cards to buy things we don’t have cash to purchase.
However, we have accumulated $30,000 dollars in credit card debt mostly due to medical expences. My wife and I make around $55,000 per year and we have a 401k that is worth $25,000. My son just had another surgery that has put us in the hole again by $5000. We converted the credit card debt into a 72 month personal loan. However, after we make our monthly payments we have no money left for emergency events.
What are we doing wrong? I pay $400 per month for medical benefits and we now are in debt $35,000. Do you have any suggestion? I can’t even sleep anymore, waiting for the next shoe to drop. I hate to even think of every filing bankruptcy. Is that our only option?
Paul”
Dear Paul,
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What are you doing wrong you ask? I’ll tell you — nothing.
It sounds to me like you are making all the right moves and plans but what has happened to you is life and a first hand experience with the failure of the United States healthcare system.
I recently spent two years living in England and while many people bitch and complain about the National Health Service (NHS) in the UK, I’ve got to tell you that they provided me with medical care for free and without a worry if I was going to be able to get care. And yes, everyone that has a horror story about waiting for some NHS service, I’ve already heard them.
Paul, I think the heart of the issue is that your combined salary of $55,000 just doesn’t go far these days and if anything, the only thing you are guilty of is under earning.
Medical debt is a major contributor to why people go bankrupt, and now you know why. I don’t think that bankruptcy is something to be feared in your situation. It may be as inevitable as your sons last surgery in order to help your finances to get better. Get a free bankruptcy consultation from a local bankruptcy attorney and get the facts.
And if that is a path that you elect to follow, I would urge you, after your bankruptcy, to take all your extra cash each month and put it into a boring old savings account to prepare for unexpected future financial demands that might come your way. And they will.
