Please list the consequences of bankruptcy as a direct result of a medical condition.

[ColbertWatcher]

One of the most powerful arguments against keeping our health care system the way it is now is that too many people go into bankruptcy.

However, the statement usually ends there. The presumption is that everyone knows that bankruptcy is bad without elaborating.

I know often when I search for anything healthcare-related more often than not one of the top 10 hits is a DU thread.

So, I ask my fellow DUers, what happens after a person declares bankruptcy as a result of a devastating illness?

[NMDemDist2]

1. you get an unexpected sense of relief

and drive your current car for another 4 years.

YMMV

[imdjh]

2. In Florida not much.

Your house is exempt up to something like a half million. Certain retirement accounts are exempt. Prepaid college program is exempt.

Your personal property is exempt up to something like $5000, a combined figure of the yardsale value of all your personal stuff and the equity you have in your car.

If you bought anything on a Sears charge plan, Sears wants it back, it's the only charge card which secures the debt against the merchandise. Sears has supposedly gone to people's houses and taken back appliances, carpet, and air conditioning systems. I think you can "reaffirm" your debt to Sears if you want to keep your stuff, and I guess it would follow that Sears items are not counted in your exempt property.

I had a friend do it last month and he said it was pretty painless.

Oh, most important part: you have to have $1400 in cash to pay the lawyer and the filing fee ($300).

[Snazzy]

3. start of a list

--Harassment by creditors, harassment of your friends, family, workplace by creditors
--Loss of credit cards (or extremely high rate replacements) means air flight, rental cars, hotel rooms, storage, all kinds of stuff, a pain to do. Not impossible, but you are now different class of citizen
--Can't get a rental lease from failing credit check (and other things like phones, cell phones)
--Many jobs run credit checks--can't get those
--Purchasing on credit/lease/mortgage the large items isn't happening (car, house, expensive equipment so on).
--Problems opening banking accounts, obtaining insurance of all types

I'm sure there's specific financial horror stories out there you can find. Losing the house as complications of illness is something I hear about often around here. Likewise the spiral of not being insurable anymore.

[ColbertWatcher]

4. Thank you. n/t

[blondeatlast]

14. Foregoing home and car repairs and maintenance

Having been there, I can attest to all of that. We had a very nice income but lived well under the means our friends in a similar bracket lived in because we had to pay cash and save for big things--and never, never a luxury.

For me, the killer was the background checks--ouch. I failed to get a couple of good jobs that should have been a walk and that I had good contacts to get. My contacts told me that for whatever reason, HR didn't pass me. Gosh, I wonder why? :sarcasm:

[BuelahWitch]

34. Uh no, when you file BK creditor harassment CEASES

Please don't push false information to scare people away from BK if they need it.

[Snazzy]

38. I'm not pushing anything

Chill.

And no it doesn't go away when you file. Aggravation by creditors will cease at some point in the process, depends on how the court handles it in your locale. It may not be until there is a judgment or a meeting with a trustee/creditors, and of course requires you to notify them legally before they will stop going after you. You need a complete list, which is tricky sometimes when your debt keeps getting sold/traded to different entities and collectors without you being in the loop.

I haven't been involved with a bankruptcy since the new credit card laws, so I don't know exactly how that plays out, but it is my impression you will still be hearing from them nowadays.

Now I have consulted one way or another on personal bankruptcies about 5-6 times, and been through 3 corporate ones that come to mind. Have you? DU is so full of drive by rude posts even when you try to be helpful. Makes me not want to bother.

I also still receive occasional collection phone calls for my dad from both creditors and the government. He's been dead 2 years and did his last bankruptcy in the 80's. His federal lien/debt was several million, so they don't exactly ever seem to give up. His situation was far more complicated than a simple personal chapter 7, but sometimes things are a lot more complicated than drive by one liners would suggest.

(edit clarity)

[Snazzy]

39. or to put it better for purposes of the list

creditor collection harassment is a consequence of going broke from a health care crisis.

Declaring and receiving a judgment of legal bankruptcy will eventually (or "may" instead of "will" in more complicated circumstances) relieve that harassment. That harassment itself may be a main reason to seek legal bankruptcy.

That's why it was on my list.

[customerserviceguy]

5. I went bankrupt in 1996

not as a result of a medical expense, but as a result of staggering legal costs associated with getting my son's custody away from his mother.

I was able to get credit, but at a fairly high interest rate. My credit score did not significantly improve until the bankruptcy dropped off the record about three years ago. I never did have any problems getting a job over it, even one that did fairly intensive security checks when I worked in a computer chip factory.

[armyowalgreens]

6. You further lose the ability to pay for massive medical bills...

At least before you filed for bankruptcy, you could put stuff on a credit card or pay for it with loan money.

Now you can't even do that.

Society functions on credit and prices are higher because of it; much higher. People without credit cannot afford basic necessities (like a house or even a damn cell phone), let alone massive medical bills.

[ColbertWatcher]

25. Good point. n/t

[old mark]

7. We did it twice. Not much happened either time. We started getting

offers for new credit cards within months of the bankruptcy hearing, and several home loan and re-finance offers per week after about 6 months. They think you have lots of extra money after you file.

The judge was very matter of fact both times - second time the judge told us that medical bills are the number one reason for bankruptcies in the US, and that he had several similar cases every day.

We have had no negative long term consequences - our credit rating went to hell for a few years, but we got new credit cards after 2 years or so - all paid off now - and our credit rating is very good, although we never use credit cards any more.

mark

ADDED I think a lot of it varies by state. We had no real problems with either one, despite debts to Sears and loss of credit cards.

[ColbertWatcher]

24. Were both your bankruptcies due to medical expenses? n/t

[old mark]

35. Yes. Both due to my wife's illnesses. The first was begun before we

got married, the second about 9 years after the first. Both involved medical bills around $80,000. She has had 8 surgeries for Crohn's disease, she has Hep C, scoliosis, stenosis, spinal arthritis, and a bad pancreas. She has had encephalopathy and been in comas from which I was told she would not recover - 5 times.
Today, she has had both knees replaces - and one shoulder - and her liver function is in the normal range for over a year.
Her liver guys told us she had maybe 5 years to live...that was in 1999.

There was no point in negotiating the debts - we would never have been able to pay them off with our limited income. She has not been able to work for over 11 years, and I had several heart attacks and am retired since '07.

We bought our house after the first bankruptcy, had no problems keeping the house, all our posessions and 2 cars through the second one.

mark

[mdavies013]

8. I would first try to negotiate with your creditors...

Will this be an ongoing illness? You can only declare bankruptcy once every 7 or 10 years. You may be able to use the threat of bankruptcy as a negotiating tool.

We had to declare bankruptcy this year. We owned 2.5 properties, had one car financed, and multiple credit cards, loans and medical expenses. For months we were living on credit cards because of the downturn in the real estate market, then two of our rental units went vacant. It was a perfect storm of suck. We tried to negotiate with creditors, including one of the mortgage companies for the rental house - no deal...they didn't even try (which resulted in our final decision to file - to avoid a deficiency judgement when they forclosed).

I was surprised by the assets that we could protect. There is peace in knowing we could keep our house, belongings and one vehicle. We picked up a cheap car that while not the best ride...goes from point A to point B.

If this is something that you are considering - stop all withholdings for state and federal taxes and keep the money in a safe place. We did not plan ahead of time and basically had a high tax refund which we had to use an exemption to protect. Had we been more proactive we could have shielded another $8,000 of other assets.

The cost was around $1,500. We get letters all the time from car dealers...and have received quite a few horrible offers for credit cards (open an account - and they will qualify you for at least $500 - and the available balance will be $160 - meaning $340 in upfront fees). So far we have resisted. We've saved - and for the first time in a long time have a few thousand sitting in the bank.

[PA Democrat]

9. Some hospitals have begun to check people's credit reports when they walk in the door.

Now they are doing the credit check to see if people (without insurance or with high deductibles) have available credit on their credit cards to pay their bills and are encouraging people to put medical bills on high interest credit cards.

I wonder when they will start turning people away because of bad credit?

http://www.consumerreports.org/cro/money/credit-loan/cr-investigates-medical-debt/hospitals-check-credit-reports/medical-debt-hospitals-check-credit-reports.htm

[SammyWinstonJack]

16. Whoa! Really? Whatta Country.

x(

[PA Democrat]

19. I even saw a TV commercial by a CC company about how they are there "to help"

a customer who is saddled with medical bills. They are parasites feeding off the lifeblood of people facing medical crises.

Check out the link I posted above. The article will turn your stomach.

[ColbertWatcher]

26. You should consider posting that as its own thread. n/t

[DailyGrind51]

10. Depending on the possibility or degree of disability, they may never recover!

If they have a chronic illness, like diabetes, treatable but not curable cancer, stroke, multiple sclerosis, etc., they are likely to die penniless in a public ward.

[ColbertWatcher]

27. All because of medical bills? n/t

[DailyGrind51]

40. Chronic illness is extremely expensive, especially for those who are unable to work.

Medical bills for chronic conditions, even with health insurance (deductibles and co-pays, can still amount to thousands of dollars per year. It is difficult enough when a person can retain employment, but the ability to work will determine whether that person even has a revenue source. My portion of the bills for two cancer surgeries and two years of combination chemotherapy was around $75,000, and I has employer provided 100% hospitalization, 80/20% major medical!

"Costs of Chronic Disease

The United States cannot effectively address escalating health care costs without addressing the problem of chronic diseases:

* In 2005, 133 million people, almost half of all Americans lived with at least one chronic condition.
* Chronic diseases account for 70% of all deaths in the United States.
* The medical care costs of people with chronic diseases account for more than 75% of the nation’s $2 trillion medical care costs.
* Chronic diseases account for one-third of the years of potential life lost before age 65.
* Hospitalizations for pregnancy-related complications occurring before delivery account for more than $1 billion annually.
* The direct and indirect costs of diabetes is $174 billion a year.
* Each year, arthritis results in estimated medical care costs of nearly $81 billion, and estimated total costs (medical care and lost productivity) of $128 billion.
* The estimated direct and indirect costs associated with smoking exceed $193 billion annually.
* In 2008, the cost of heart disease and stroke in the U.S. is projected to be $448 billion.
* The estimated total costs of obesity was nearly $117 billion in 2000.
* Cancer costs the nation an estimated $89 billion annually in direct medical costs.
* Nearly $98.6 billion is spent on dental services each year."

http://www.cdc.gov/NCCdphp/overview.htm

[Statistical]

11. Bankruptcy stays on your credit report for 10 years but....

it all depends on your choices after Bankruptcy.

I filed Bankruptcy 8 years ago. After about 5 years my credit was flawless (740 FICO) despite having a BK on my credit report.

No problems getting credit after about 4 years except Bank of America. BofA won't give me credit for anything. Recently applied for Royal Carribbean CC to saves some points towards a cruise. Got denied, couldn't figure it out, had my wife apply instead = approved, got the denial notice. RCL reward card is run by ...... BofA.

[OneGrassRoot]

12. Interesting...

I'm coming up on four years this December and hoping something may start to be available to me again after that time.

I was hoping to renegotiate my HELOC, but Countrywide was bought out by....Bank of America.

:(

BTW, in response to the OP, I haven't had medical insurance for about 10 years and have, thank goodness, essentially remained healthy. I had to have one lesion removed about six years ago, which I chose to do given a history of melanoma removal in the early 90's, and that was the straw that broke the camel's back leading me to bankruptcy.

Living paycheck to paycheck as a single parent, no benefits, and no credit worthiness is not a good feeling. The underlying, chronic stress can be suffocating, broken only by times of acute stress and crisis.

Joy, joy......

[Berry Cool]

13. I'm starting to wonder if the horrible utter awfulness that bankruptcy supposedly is is overrated.

From the stories of some people here, it doesn't seem so bad.

You may have trouble getting credit cards...but you can do most things you can do with a credit card with a debit card instead.

There are places that won't check your credit before extending you a rental lease. Not all may be good, but you might be surprised at what you find, especially from private landlords.

There are all kinds of pay-by-the-month phone plans out there. Several cell phone providers don't require credit checks.

Not all employers run credit checks, even for good jobs. Their attitude is, unless the job involves handling money, there is no need.

Opening banking accounts is usually possible if you have a job, and so is getting insurance if it's through your employer (if you employer offers it).

If you have no job, or an employer that doesn't offer much, yes, that makes things tougher. But sometimes it seems to me as if bankruptcy is sold to us as The Worst Possible Thing That Can Happen to a Person, and to be avoided at all possible costs--when I'm wondering if, for some people, it's not way preferable to trying to work out something with their creditors for the mounds of debt they owe and then constantly being harassed for the money.

[Laelth]

15. Bankruptcy is the preferable option for many people.

That, of course, is why they do it. But there's a lot of shame involved. Our society teaches us that we are responsible for our own misery when, for most of us, that's not the case at all. The pro-capitalist propaganda machine works very well. The rich want us to pay our debts, at all cost, and many of us do, even though bankruptcy would be preferable.

:dem:

-Laelth

[SeattleGirl]

41. It was for my husband and I.

Owed over $70K, and no matter how much we paid toward the bills (the majority of which were medical), we could not make a dent in them, because of late fees, interest, etc. We were constantly under stress, and just could not get out of the hole. We did a lot of research on different ways to deal with the debt, and came to the conclusion that bankruptcy was our best option.

[ColbertWatcher]

28. I'm guessing that some of the stories are about bankruptcy in general ...

... not bankruptcy as a result of medical expenses or debilitating medical condition.

[old mark]

36. We started getting credit card apps in the mail about 2 months

after we filed the first time. Our lawyer told s we would get a lot and to ignore them for a while for our own protection. We got apps to re-fi our mortgage, ans lots of ads from new car dealers.

We finally did get new credit cards with no problems - the bankruptcy was never even mentioned by them.

None of our creditors even showed up for the hearings.
Took about 10 minutes total.
Our lawyer charged us $500.

mark

[cliffordu]

17. You get rid of that most idiotic American idea that your stuff defines who you are

and that unbridled consumption is freedom.

And you lean to live without credit altogether, which in my case is a blessing. Truly. And you won't see me using that word lightly.

My illness and subsequent bankruptcy changed my view of life altogether:

I used to understand the price of everything and the value of nothing. Now, not so much.

And you learn who your friends really are.

Bukowski said "If you want to find out who your friends are, get a jail sentence"


I second that, substituting "going into poverty" for the jail term....

[hunter]

32. Not having a "credit rating" can be very liberating.

I don't know what my credit rating is anymore, and I don't care. Medical bills and debt collectors set me free.

[cliffordu]

33. We don't need no steenkin' credit.

:hi:

[Lars39]

18. We lost the house we built.

We're renting now, want to buy or build again, but if I wind up in a nursing home down the line, there goes the house. Probably a moot point anyway with our credit rating in the dumpster.:(
The stress involved in dealing with almost a year of treatments, surgery, tests,etc and then organizing a bankruptcy and losing our house was almost too much. I really don't see how my husband did it...he was a contractor at the time, scaring up his own clients, literally working 16-18 hour days...he would bring his laptop and program while I was getting chemo, desperately trying to keep a roof over our heads.
Oh, and the whole time I was on COBRA and the rest of my family did without insurance. So on top of everything else we had to worry about finding insurance that accepted pre-existing conditions.

We're carrying about $10,000 in medical bills right now. I don't get all the tests I need done because we don't have the money needed to outright pay for the procedure or what it takes to meet the deductible. All our health care dollars seems to go for me...my husband hasn't even had a physical in about 7 years.

I don't know if we'll ever have financial stability, let alone enough for retirement.

[SammyWinstonJack]

20. .

:hug:

[Lars39]

21. Thanks

:hi: :hug:

[ColbertWatcher]

29. I'm sorry.

I wish the best for you and your family and may all your days be Republican-free.

:hug:

[Greyhound]

22. Since our glorious leaders passed the foul "Bankruptcy Reform Act", it has become far more difficult

to get that fresh start that bankruptcy used to provide. Further, more and more of modern life's basic necessities are more difficult or impossible to access.

10 - 15 years ago your chances of getting a job had nothing to do with your credit, now it is accepted practice to discriminate based upon it. Finding a place to live becomes more difficult, forcing many to pay far more and live in less desirable areas than they might otherwise afford.

Your "new" health care becomes nonexistent, except for the emergency room at the nearest hospital. You have no dental, mental, or preventative care and forget about treatment for chronic conditions.

The list is very long, but I think this hits the high points.

[ColbertWatcher]

30. If you get the chance to finish the list please post it.

The reason I started this thread was to eliminate the assumption that a bankruptcy due to a medical condition was a two or three step process (medical condition followed by bankruptcy followed by returning to normal).

A more complete list would help open a few eyes to reality (lurkers for instance).

[Greyhound]

37. As our transformation from citizens to consumers has progressed,

we have become our credit scores.

Until about 20 years ago, bankruptcy used to carry a social stigma with it and that was the primary force against using it. The parasite class, having no qualms or concerns with the general society's provincial attitudes (they have their own, invitation-only, society), often used this handy tool to amass more wealth than would normally be possible. Just borrow as much as you can, for as long as you can, and walk away from it every seven years.

Once this strategy became more commonly used by the flock and the social stigma lost it's power to control in the mid/late 80s (Gordon Gecko and the "greed is good" mantra), we saw the pressure to take this tool away from them start to mount.

Making a comprehensive list is impractical (at least for me, as I just don't want to take the time and put in the effort), but since we have accepted this assignation of "creditworthiness" as a personal identifier of standing within the community replacing the old standards of deeds and ability, it has crept into virtually every aspect of our lives.

Where you live, what you are allowed to learn, how you make your living, what strata of social services you are granted access to, where and how you travel, etc.

To a large extent, we have become our credit scores. Worse, we have accepted this yoke with little complaint and have not even demanded any accountability from those that assign it.

[Lars39]

23. Worse than bankruptcy: too poor to afford a bankruptcy lawyer.

At least with bankruptcy you get relief from the never-ending debt collections. Even if you qualify for a Chapter 7, where your debts are wiped out, you still have to have enough money to pay for the lawyer.

[ColbertWatcher]

31. Good point. Thank you. n/t