When you first get diagnosed with a chronic or life-threatening illness, you worry mostly about your health and future. Will you see your children (or grandchildren) graduate school? Will the treatments cause pain and discomfort? Will you be part of the percentage of people who “beat” this condition?
Very few people think about the financial implications of a chronic or serious illness until reality rears its ugly head. Even if you have the best insurance in the world, a single treatment could cost tens of thousands of dollars. Any amount of co-insurance, even 5 percent, could quickly become overwhelming.
Even co-pays, at $20 each, could cause medical debt if you have chemotherapy several times a week, as well as radiation and check-ups with your primary care physician and oncologist. Surgeries can also create massive medical bills. Roughly a third of adults with cancer go into debt as a result of their treatments. Approximately three percent of those with cancer in the United States will end up filing for bankruptcy relief as a result of their diagnosis. After battling a disease for months or years, those with cancer then have to work to rebuild their finances as well, which can be quite difficult.
Cancer patients shouldn’t lose everything just to live
One of the saddest truths about for-profit medicine is that those who most desperately need medical help can end up making hard financial choices to receive it. No one should have to choose between paying their mortgage and paying for an experimental drug that could help them live. Sadly, many Americans face this decision every year. When that debt reaches an impossible level or the patient has completed treatment, it may be time to look over the figures and plan for the future. That future may include bankruptcy, if your medical debt is substantial.
No matter how bad things look, you should try to avoid using your home equity to pay for medical treatments. Using your income, investments or even lines of credit for pay makes much more sense. After all, you likely won’t return to work until after your treatment is complete. The higher your mortgage and second mortgage payments, the harder it will be to make ends meet while you’re in treatment. You shouldn’t have to sell your home or face foreclosure. Thankfully, your home equity, to a degree, is protected in both Chapter 7 and Chapter 13 bankruptcy proceedings.
A financial clean slate
Of course, medical lines of credit can quickly overwhelm patients. The good news is that these lines of credit are typically dischargeable during a bankruptcy. Once you’ve reached a point where minimum payments are no longer possible or lenders start threatening to sue, you will need to really consider if you’ll ever pay these debts off in full. Bankruptcy can offer people who have just gone into remission a financial clean slate to go with the clean bill of health.