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Very Preliminary- Considering bankruptcy

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Very Preliminary- Considering bankruptcy

My husband and I have about 6,000$ in medical debt (from a period of time with insurance, but huge deductible). It has been turned over to a collection agency.  This agency is requiring more of a payment that we feel like we can do.  We have currently agreed to it, but it leaves no margin for our big family.  It doesn't seem like enough to warrant bankruptcy, but my understanding is they can demand whatever monthly payment they want or take you to court and do garnishments- I have no idea how much that would be.  I currently have an appointment with Legal Aid a month from now to discuss bankruptcy.  We have no plans to purchase a home, do not use credit cards at all, and both got new cars last year (before the medical debt was an issue). Insurance and associated costs are not an issue this year.  Here are our "numbers."


family of 6 (2 adults- 1 full time and 1 homemaker + 4 kids)

*no significant savings or retirement*

income- 3520

taxes- 270

rent (apartment)- 885

utilities- 315

insurance (car and renters)- 185

groceries- 700 * a stretch with 3 teenagers

gas- 200

car payment 1- 275 *the cars were purchased new last year- we were both desperate.  I would not include them in the bankruptcy- only medical debt.

car payment 2- 190

current medical debt payment- 200

misc- household, save, medical, clothing...- 300 *this may seem like a lot, but with a large family including 3 teenagers- it doesn't go very far.  




Message 1 of 6
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Re: Very Preliminary- Considering bankruptcy

Great job on budgeting. I looks to me that you either missed some payments or stopped making payments since the bill is sent to a collection agency already. You can always offer them $75/month "take it or leave it" with a warning that you will file BK if they don't accept your position. 

Message 2 of 6
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Re: Very Preliminary- Considering bankruptcy

So total debt is 6k ?


if so , I would not bk over 6k. Personally, I would sell cars and get rid of payments. Get cheap cars for cash.  Not sure bk threat would work, they hear that all the time. 

Message 3 of 6
Senior Contributor

Re: Very Preliminary- Considering bankruptcy

What state are you in? I'm in Arizona and had a medical emergency in 2011 when I had no insurance and ended up with over $6k in medical bills. I found out that Arizona has a state law that medical care providers must accept a payment plan with as little $25 per month. So the two biggies - ambulance for an hour trip to a Tucson hospital and the hospital - I sent them each $25 / mo. After a year & a half or so they both sent me a letter that they had written off the balance and no further payments were required.

Message 4 of 6
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Re: Very Preliminary- Considering bankruptcy

medical debt of $6000?


i would explore all options.  

declaring bankruptcy would have to be the last, end of the road, no other option, option.


I just want to say that since one person is a homemaker, i think

more money can be saved each month to perhaps free some up.


We have 4 kids and two are teenagers soon to be 14 and 18

We spend $250/mo and up to $300/mo on groceries.

While we still do throw some out to spilage or older leftovers, 

we do participate into making larger batches of chili, soups, casseroles, etc and freeze.

and we also do not eat any fast food, no animal products (can actually save mucho)

we also use a lot of "so called" staples such as rice, beans, pastas, 

and TONS of fresh produce and fruits, many that are even local.

Just a note: $40-60 wk at aldi, $20/wk or so to either giant/weis

and then some ordering online at amazon or specialty sites. maybe $50/mo or every other.

And perhaps $5-10 wk for local stands. 


We do a lot of home cooking, again we only eat out once a month or so.


We also cut out all other spending. We do not buy anything on sight/seen model.

We always think about it....and that includes $2 items, because before you know it,

50 of those $2 items equal 100 buckaroos in the shopping cart.


Obviously we look for specials on clothing when necessary, although our kids

have no issues of wearing hand me downs ...even in middle/high school.


Penny pincher, or cheapskate, whatever it takes to get financial happiness.


Just write down on paper and even for one or two months of spending,

you may see some (or many) ways to SAVE tonZZZZZZZ of cash.


Not that I would promote lyft/uber/pizza delivery....BUT those are also

options to increase income.


Hope this helps

Message 5 of 6
Senior Contributor

Re: Very Preliminary- Considering bankruptcy

I would not file for medical debt.

Keep writing letters to hospital explaining the situation.

Try to go around the debt collector directly to the hospital.

MANY hospitals offer 0% and/or forgiveness plans for payment.

You CAN negotiate down the balance and payments.

BK should be your last resort.


Worst case, IGNORE them and let the debt fall off your credit report faster than your BK will.



Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $500k unsecured credit in 2024.


Message 6 of 6
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