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More Medical Debt Info in Response to Last Post

June 13th, 2007 at 12:05 am

I decided to make a proper entry in answer to some comments left on my last post about my medical debt, because it just got too long to be a comment.

No, the hospital will not negotiate any further. As it is, my parents put their house up for collateral against this debt because mine wasn't worth that amount of money. If I fail to pay on the debt my parents would have to so it is something I have to be very conscientious about.

I have never been one to walk away from my debt, no matter how tempting or how much easier it would have made my life to do so. And it will get paid, either over the course of the next twenty odd years or when my parents die and I inherit the house and sell it. Even if the house is sold for medical care the mortgage would be paid off first as the oldest debt and then I'd just pay back the surviving parent free of interest. It is more likely they will die before I can pay it off since Dad is 72 or 73 (can't ever remember if he's 5.5 years older than Mom or 4.5) and Mom is nearly 68. But that's obviously not the option I prefer! I want my folks around as long as possible.

My parents wanted to cash out their IRA and pay it and just have me pay them $1000 a month interest free until the remainder of the debt was paid down, since they have enough in CD's to live off the interest plus the thousand, but since their IRA was made from a never taxed pension the penalty would have been enormous. So that didn't happen.

Mom says that when Dad dies she can then cash out the IRA without penalty and pay it off and then me pay her the rest of what is owed interest free. Another route I don't really want to go.

Well, it'll get paid and I'm feeling better today about it. Yesterday was just really hard.

6 Responses to “More Medical Debt Info in Response to Last Post”

  1. shadon Says:
    1181700656

    Thanks for this post and your last! It gives me great perspective on my pitiful little rant. Smile

  2. Thrifty Ray Says:
    1181700680

    LR- regarding penalties...once and IRA owner reaches 59 1/2 there should be no penalties for IRA wds. (Most banks waive earliy wd penalties as well)

    However, there most likely would be tax consequenses depending on their annual income (normal income taxes) ...but NO penalties.

    I hope this helps some...perhaps a visit to a tax guy would provide a better financial picture for you.

    In any case, good luck!

  3. LuckyRobin Says:
    1181709016

    I meant tax penalty not early withdrawal penalty. I didn't write that clearly.

  4. Ima saver Says:
    1181736958

    You are a wonderful person. Just take it one day at a time.

  5. fern Says:
    1181750890

    I hope you are taking the medical deduction on your taxes, then? You know, the one that lets you take a tax deduction for medical expenses that exceed 7.5% of your gross income?

    Just one more parting thought and i hope i don't make anyone angry over this comment.

    You are honest, and you have integrity in wishing to pay your debt. That much is clear. And it's an admirable quality. But the pragmatic side of me says a debt like this could have significant, lasting impact on your financial well-being for the long term.

    I'm not saying your operation was not worth it or absolutely essential, of course it was. I'm just saying that everything in this world with a price tag has its value set by the marketplace, not its actual cost. Doctors' and hospital services are no exception. The hospital may have charged you x amount cus that's the going rate, but what it actually cost them in terms of labor, expertise, supplies and so on could be half that. And as such, that could still be further negotiated.

    I'm not saying that you should wimp out on paying them back, and i guess some people here might consider what i'm saying as somewhat controversial. But the debt is so high i think you could make a very plausible case for further debt forgiveness based on the enormity of the debt and your ability to pay.

  6. LuckyRobin Says:
    1181783441

    Fern, it was three surgeries over the course of 3 years, a whole lot of chemicals pumped into my body, more expensive condition specific medications than I can name or remember, and a lot of time in the actual hospital. It was $800,000 before the insurance picked up its end. And I got an itemized receipt each time.

    As for the medical deduction, I wish. Because the mortgage is on my parent's house for the medical debt and it is technically in their name I can't claim the medical deduction for it. Tax man says no.

    In another year DH will be making $2000 net more every 4 weeks than he is currently making right now. And his position will advance again, probably five years after that, when he gets his next degree. So, there is a light at the end of the tunnel and it will get better. It already is better than a year ago.

    We had tried to negotiate further with the hospital at the time but we were so far behind at that point they wouldn't budge any further.

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