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Ulcers and Credit Piled Up Debt

Sunday, March 20, 2005; Page F11

"I feel like I've got a big 'L' on my forehead," said Donna Roman.

L, she added, is for "Loser" because Roman, a 52-year-old nurse in New Jersey, is filing for bankruptcy protection.

Donna Roman and her family resorted to credit cards when illness stopped her paycheck. (Helayne Seidman For The Washington Post)

_____In Focus: Bankruptcy_____
Bankruptcy's Next Chapter (The Washington Post, Mar 20, 2005)
Keeping Some Hiding Places (The Washington Post, Mar 20, 2005)
_____3 Faces of Bankruptcy_____
Interest, Late Fees Tripled The Card Companies' Bill (The Washington Post, Mar 20, 2005)
Penalties and Refusals Almost Everywhere He Turned (The Washington Post, Mar 20, 2005)
_____Color of Money_____
Mandatory Counseling, A Good Idea in Theory: Michelle Singletary says the bankruptcy counseling provision in the bankruptcy bill "is there as a roadblock. It's a setup, lobbied for by banks and credit card companies, to steer people away from bankruptcy to debt repayment plans."

"I'm a nurse. I'm not stupid. I'm very good at what I do," she said. But that's little consolation for the $31,680 in debt that she and her family racked up as they tried to cope with an illness that landed her in the hospital four times in the past year and a half.

That meant she was unable to earn her $45,000-a-year salary -- and that she had substantial medical bills, even with her husband's health insurance. Co-payments for visits to the doctor ran at least $100 a month, while prescriptions cost her an additional $200 a month.

Roman, who works as a nurse at an assisted living facility, met with her lawyer last week to draw up bankruptcy papers. It is not a move that she takes lightly. But, she said, it's the only way she can see digging out of the financial hole she's in.

For Roman, filing for bankruptcy now may also be timely. If she were to wait for another year and the bankruptcy bill now being debated by Congress were in effect, Roman might be unable to discharge most of her debts under Chapter 7 bankruptcy protection, according to her lawyer, Charles Juntikka.

That's because her husband, a truck driver, also earns about $45,000 a year. As a result, her household income would be above $74,220, New Jersey's median income for a family of three (her 18-year-old lives with them). That's one of the tests in the proposed bankruptcy law for determining who is eligible to discharge debts under Chapter 7 of the bankruptcy code and who must file under Chapter 13, which requires more repayment.

She might still be eligible to file for Chapter 7 if she could pass a "means test" to show that her reasonable monthly living expenses were too high for her to make repayment. Juntikka said he thought that would be difficult for Roman, who helps support her 28-year-old son who recently moved out of the family home.

The son returned from the Army's 82nd Airborne Division in 2003 and now works for a construction company, but Roman still pays his $200 monthly car payment to repay money she borrowed from him while he was in the service.

Juntikka said Roman's case is not unusual. "She's at least a third of the kind of cases we do: A debtor or spouse or kid gets very sick; the family ends up losing a portion of its income and uses a portion of their credit card to cover what insurance doesn't. By the time the family's out of the health crisis, they are swamped. They attempt to make minimum payments, until it strains the whole fabric of the family."

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