Get Out of Debt Guy

My Financial Life Was in a Traumatic Accident

Posted May 16, 2013

Reader Question

Dear Steve,

I was in an automobile accident in 11/'05, hit by another driver who had stolen a car, therfore I was unable to sue anyone for the accident. I had no health insurance and my uninsured motorist policy was $100k, which of course the hospital negotiated a payment towards my $300,000 bill.

I was in an automobile accident in Nov. '05, was comatose (with a traumatic brain injury) and eventually discharged in Feb. '06.

I have not worked since then and my husband had to stay home with me through July '10.

During this time we were unable to pay bills and received a notice to be in court from one of the credit card companies.

We did not show for the court date therefore they were awarded a judgemnet against us.

The amount of the debt is approximately $4,000. We also have judgements against us from the IRS and Social Secuity, both of which are on our credit reports.

Can the credit card company attach my husband's wages?

They have offered us a settlement, I think for approximately $700 - $1000. Thank you for your assistance.



Dear Milesa,

Thank goodness you are doing better. That's something we can be grateful for.

I suspect you still have quite a bit of medical debt outstanding if the insurance company only paid $100,000 of a $300,000 bill. Rather than just focus on this one debt I think we need to look at your situation in a broader context.

These types of unfortunate situations often lead to traumatic and unmanageable debt. It is probably unreasonable to assume you can pay your way out of this dark pit of debt.

While some people claim everyone should be responsible for repaying every penny they owe, bankruptcy is a right afforded to everyone under the law. Bankruptcy serves a useful economic purpose and allows people in impossible situations to get a legal fresh start and second chance. It is a right afforded to you under the U.S. Constitution.

A chapter 7 bankruptcy would eliminate your debt in about 90 days and can even discharge old taxes dues and Social Security overpayments.

Given the larger scope of your situation I think it would make more sense for you to click here to find a local bankruptcy attorney. Meet with the attorney and don't feel pressured to make a decision. You and your husband should contemplate what you learned and if you agree, then take action to get your life back and move on.

We need to get your financial life out of the coma it is in.

Steve Rhode
WRAL Get Out of Debt Guy

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  • steverhode May 16, 2013

    @common tater All suspected bankruptcy fraud can be reported at

    If a bankruptcy attorney told those folks to do that they would have known charges within 90 days of bankruptcy may not be included or discharged.

    You bring up a really good point about the medical debt. It seems your opinion is that medical debt is a valid reason to file bankruptcy and others who declare bankruptcy are reckless. But couldn't the same argument be made about people that don't have sufficient medical insurance that they were operating recklessly and irresponsibly as well?

    I'm not saying I believe that position but it seems to be hard to accept some reasons over others as justifiable. Debt is debt.

    The reality is there is little evidence of bankruptcy fraud and those that are charged and convicted with fraud can face jail time and do go to jail or cannot discharge their debt in bankruptcy.

  • common tater May 16, 2013

    The way I read it, the constitution doesn't give everyone the right to declare bankruptcy, it just gives congress the right to enact bankruptcy law. While I think massive medical bills are a valid reason to use it, there's a lot of abuse of bankruptcy. I know of people making $100k plus that just over-spend, then used bankruptcy to get out of credit card debt. The lawyer even told them they should max out their debt by going on an expensive vacation before declaring.

About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.