Medical Debt or Divorce?
Nicholas Kristof had a heartbreaking tale of medical debt and divorce in the New York Times over the weekend. He relates the story of an anonymous friend whose husband was diagnosed with dementia and faced intensive care for the rest of his life, including being institutionalized.
When she spoke with a hospital and social worker about her options and how she might pay for this care, the social worker advised her to get a divorce to protect her assets.
“Eventually, after the expenses whittled away their combined assets, her husband could go on Medicaid — but by then their children’s nest egg would be gone, along with her 401(k) plan. She would face a bleak retirement with neither her husband nor her savings.”
But with the divorce, the social worker said, the wife’s assets would be protected and the husband would become a ward of the state. So the wife filed for a divorce, although she continues to quietly live with her ex-husband and care for him.
What a terrible choice: medical debt or divorce.
Are there other options? Maybe. Filing Chapter 7 bankruptcy is designed to eliminate medical debt quickly, and, depending on the state bankruptcy exemptions where you live, you may be able to protect valuable assets, like your home.