Too Soon To File

Barry's friend is on disability and his wife has terminal cancer. They're broke and headed for bankruptcy. Not so fast, Dave says.

QUESTION: Barry’s friend has a problem. The friend’s wife has terminal cancer and he’s on disability income. They’ve sold everything they have and only have the house and two cars left. He has met with a bankruptcy attorney, who told him to file bankruptcy. What does Dave say?

ANSWER: It’s possible that bankruptcy is where he ends up, but it’s way too early to say on that. If he declares bankruptcy now, then thousands of dollars of medical bills still remain. You do have to think about where he will live between now and then, because he’ll lose the house in the bankruptcy. Reaffirm this house and let everything else go, if he can afford the house. But don’t do that until well after the last medical bills come in. We’re still months and months away from talking about this. Wait and see where you are when this is over, then decide what to do.