How to manage my debt and life as a whole
September 19, 2009 12:34 PM   Subscribe

How do I get my life on track with high debt and a chronic medical condition?

So i'm 26 years old and have been completely on my own since i was 18. I come from a working class family who lives in a small dying town with no jobs. I knew if I was going to make something of my life in any way, I had to get out of there. Being so young and inexperienced, it's not like I could get a well paying job to support myself. And it's not like my family had any money to give me.
So 5 years ago, I took out many many loans and used that money to move myself across the country to " the big (and expensive) city" to attend college and hopefully start a new life there.

I also used the student loan money to pay for everything I would need to live on (mainly rent because the dorms were more expensive than studio apts, food, and school supplies) and even then it still wasn't enough, so I also worked full time in addition to going to school full time, just to make ends meet.

On top of this, to make matters more complicated, I also have a chronic medical condition. I have had it mildly since I was 10, but never had it addressed, or even diagnosed as to what it was, since my family lacked health insurance.

It was still fairly mild even when I moved here, but through the years got much more serious and I am now in constant daily pain and have some serious breathing issues. I tried to get health insurance on my own, but no plan would cover me due to the pre-existing condition. So I had no choice but to pay out of pocket for all medical expenses. Of course I had no out of pocket money to spare, so I used credit cards to pay all my medical bills.

And I never had enough credit to pay for anything medical that would truly diagnose me, so I resorted to many expensive pain management treatments only to be left with my condition progressively getting worse.

Now flash to present day, 5 years later, and I am $60,000 in debt from school, $10,000 from credit card debt. The job market is scarce and no one is hiring on staff. I've been taking very low pay freelance gigs which don't even amount to half of my expenses.

Currently, my bare minimum expenses amount to $1150 per month.

One of them being a health plan I pay 400 a month for after puting myself on a long waiting list for a government health plan that teams with private insurers to give coverage to high risk people. With this plan I was also able to finally get the tests I needed to diagnose me, only to discover (upon confirmation of 6 different doctor opinions to be sure) that I need a surgery that will cost a minimum of $30,000 depending on where I get it done, while knowing full well my insurance plan will most likely not cover because it is not a common surgery, though results are typically favorable.

I also pay 400 a month to see a physical therapist who I have been seeing for a year and a half and is the only source of pain relief I have found to help me (Insurance only covers 25% of 12 sessions a year, which I have already maxed out) Then pay 300 a month for my credit cards and 50 for my cell phone. And every 3 months, pay 150 forbearance fee for my student loans. That is it.

I had to leave my apartment and move in with a friend who is letting me stay there rent free until I figure something out. They are also fortunate enough to make a decent living and have been loaning me money to help pay my bills, eat their food, and use their computer. If anything, they've almost become my surrogate parent and it makes me feel like shit for puting them in that position, but I simply don't know what else to do.

I would get a second job anywhere I could find, but not only have those jobs even been hard to come by, but my health simply won't allow it at this point. I am extremely distressed, depressed, and hopeless. The biggest issues of all is the health and everything else seems to stem from it to make all the other problems worse. I don't know how much more bare minimum I can get in terms of cutting my budget when I'm already miserable and in so much pain.

I have considered going on disability, but I don't know if I would count since I still have been able to work, so long as the work isn't strenuous and I don't have to be on my feet all day.

I've considered welfare and bankruptcy but I'm not too sure how they work or if I would have to give up making enough money to pay for everything I need just to qualify. Or if bankruptcy will just ruin my credit enough to never be able to rent again.

I want to be responsible and make the best choice that will benefit me in the long run, but I don't know what that is or where to go. I really need some advice or clarity on this, so anything anyone has to say, please I'd love to hear it. Thank you.
posted by thegreatcokeolympics to Work & Money (9 answers total) 6 users marked this as a favorite
For the most part bankruptcy does not discharge student loans. Even if you have significant hardship.

You really need to speak with someone local such as a counselor or a social worker who can point you to more affordable programs for your medical condition. I think that if you figured that out, the rest would fall into place. 70k is not an unbearable debt for someone your age with an education.
posted by shownomercy at 12:53 PM on September 19, 2009

For the most part bankruptcy does not discharge student loans.

However, don't rule it out. Talk to a bankruptcy lawyer. A financially and physically crippling medical condition might make it possible to discharge the student loan debt.
posted by jayder at 1:04 PM on September 19, 2009

If your income is low enough, you could qualify for Medicaid, it's worth considering so that you can get the surgery you need, that is if Medicaid will cover it. Are you near any medical schools? They sometimes have clinics that charge a sliding fee based on income. Some hospitals also have such programs. Moving to Canada would be a great option if they'd have you, it would probably depend on your skills.

You can get rid of student loan debt if you're totally disabled, but it's difficult. Declaring bankruptcy will only get rid of your credit card debt.

Health care is a human right, especially in a country as rich as this one. Take whatever help you can get!

Good luck.
posted by mareli at 5:16 PM on September 19, 2009

Don't give up. I've been there: seemingly incurably ill, in lots of pain, mooching off of family and in a spiral of unpleasantness. (I was lucky enough to avoid the debt, at least.)

Remember that the worst thing about chronic conditions is that they give every impression of being there to stay, getting worse, forever. I don't know what you've got, but not everything that seems permanent is set in stone. I've been "diagnosed" with several illnesses I don't have, and much of the pain I was in over the years remitted, some on their own, some thanks to surgery that had unexpectedly positive side-effects (how's that for a change?). Life has many unexpected twists and turns.

I'm truly sorry to hear about the medical bills and the costs for surgery; that was a hurdle I didn't have to face. It's so hard not to derail into the socialized-medicine argument. I'll refrain.

I don't know where you are, but there must be organizations in the city that are set up to help people in your situation, groups like, say, the MS Society. There are also financial counsellors and not-for-profits that specialise in helping answer the exact questions you're asking here. Big cities offer helping hands to offset their bigness and expensiveness. You just have to search for them.

The economy will turn around. You'll come out of this. Just don't give up.
posted by bicyclefish at 5:23 PM on September 19, 2009

Maybe you need to go back to school and get another degree in a more high-demand field. Your loans will go into deferment while you are in school, and at most schools you will be able to buy student health insurance and also get treated in the student health center for free.
posted by Jacqueline at 8:45 PM on September 19, 2009

You should be able to get a hardship deferment on the student loans. That will postpone one big debt until your personal finances are doing better.
posted by Sidhedevil at 11:14 PM on September 19, 2009

Look up the nearest "Independent Living Center" - there are some in every state and they offer a wide range of services to people with disabilities. (any disability) and at least the ones I know don't ask for proof and provide the services for free. With luck, if they can't help you then they can give you some useful referrals.
posted by metahawk at 12:11 AM on September 20, 2009

Response by poster: Responding to Sidhedevil, yes I have already deferred my federal loans. It's the private loans that don't allow you to defer so I'm left to file forbearance on them, and pay the fee to do that.

Responding to Jacqueline, going back to school would never happen. I don't have the money for tuition and now my credit is bad, so I would not be able to take out loans to go back to school. I also don't want to further increase my debt. Also, I don't know if you have ever actually looked at a student health plan, but they are meant to supplement insurance you already have with your parents. They basically only cover emergency room visits.
posted by thegreatcokeolympics at 11:15 AM on September 20, 2009

IIRC, credit doesn't matter for getting Stafford Direct Loans.

Graduate student health plans are usually more substantial than plans available to undergraduates.
posted by Jacqueline at 6:13 PM on September 20, 2009

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