Have you ever wondered why someone might need to file for bankruptcy? Has someone ever confided to you that they have filed for bankruptcy? Do you wonder how that happened? Do you wonder if they were irresponsible with their money? Do you wonder if bankruptcy might happen to you?
If you answered “yes” to any of those questions, this post is for you. I want to share with everyone that bankruptcy can happen to almost anyone if the conditions are right.
During the Great Recession I was employed at a branch of a large national bank, working an average of 48 hours per week. Our bank was busy with customers and business deposits. Then when banks started to fail, and the bigger banks were taking bail-out money (including my employer), I waylaid off.
It was a devastating blow to our family budget. My husband also had full-time employment with the option to work overtime at a local manufacturing company. But while I was waiting for my unemployment to get approved, his hours were cut back as well.
As if the monetary issue weren’t enough, I was carrying our family’s health insurance which was lost when my employment ended. This required us to start the application to get on my husband’s insurance, which cost more than double what I had been paying, and also had a staggering $6500 deductible.
Before we were able to get signed up for the insurance offered at his work, I ended up having medial issues and needing emergency surgery. I went into the ER and was almost immediately taken into the operating room. I ended up staying in the hospital for a few days, and before I left I requested that someone from billing come to my room to discuss payment terms. Within minutes I had a woman discussing different payment options and programs the hospital offered to people who didn’t have insurance coverage. She assured me they would work with us and all would be fine.
As soon as I got home, I applied for different grants the hospital had available to uninsured patients. I filled everything out and supplied documentation of our income and household expenses, and mailed everything in. Within a few weeks I received a letter from the hospital stating that we made too much to qualify for their grants (we were over by only a few hundred dollars of annual income!!!). They were demanding a monthly payment of 10% the total bill or we would be taken to court and my husband’s wages would be garnished. The medical bill was almost $25,000, and 10% of that would have been more than our total monthly income! I explained to them that I wouldn’t be able to make such large payments due to my loss of employment. I even met with several different people in billing trying to arrange a payment plan that would actually fit into our budget. Unfortunately they were unwilling to work with us, and wouldn’t accept anything less than 10% a month. This left us with no other choice but to get in touch with a lawyer and explore the option of bankruptcy.
We went over everything that had happened with the lawyer and supplied all the necessary documentation. We set up a payment plan with him and got the bankruptcy under way. Once we had paid the attorney fee, we went in front of a judge with a group of other people. It was an eye-opening experience to find that so many others were filling because of crippling medical debt. The judge asked us if everything in our testimony was true, then asked us to give a brief statement of what had led to the need for this kind of financial forgiveness. He was satisfied with our paperwork and our statement, and we were excused.
I wanted to share this story because I never in my life imagined I would need to file for financial forgiveness. I used to judge people I had known who needed to file for one reason or another. I always felt that they must enjoy racking up thousands of dollars in credit card bills and then getting them forgiven. This was truly a life lesson for us I believe. It was certainly an eye opener to realize just how fast your life can change. With rising medical costs, many of us are one medical procedure away from filling Chapter 13.