In order to qualify for Social Security Disability you must meet federally established requirements for “permanent and total disability,” including being unable to work for over a year in the future.  You also must have completed enough work credits (worked enough reported full time hours) to qualify for the insurance benefit.  I believe I only just cleared that requirement.  Your monthly disability pay out is based on the highest annual income you have ever made.  For me, this was $13,579.

In 2006, that worked out to $625 a month. In addition, since I was determined to have become disabled a year earlier, they did one year back pay for me of roughly $7,400. I used that money to pay off my car. That and an additional 1.5 payments and I now owned my foxy 2002 Mazda 626. I loved that car (it is no longer with us, but that is another, tragic, story).

In the end, I had $625 a month and student loan / consumer debt / and medical bills that were more than that. In fact, my consumer debt was increasing every month. I had no money for anything – car insurance, gas, co-pays – yet I had to go to the doctor weekly or more. I had no money to contribute to the household and as I was making small payments, I would be nearly $100,000 in debt for the next 30+ years with no future possibility of ever gaining independence from my family or unburdening them.

I struggled on and continued this way for three years until I realized it was impossible. At that point, I had exhausted all allowable extensions, reductions, every possible repayment plan for my private student loans. My small federal loans had been forgiven due to disability by the US department of education, but private loans have no obligation to honor that – are not even obligated to offer income based repayment – and after three years, my payments were about to double and far exceed my monthly benefit.

I came to realize that there was no way I could manage my way out of this. My parents already were paying for the bulk of my care – including my health insurance (to be covered in a later post) – and were unduly burdened and could not afford it. My parents never made an annual income to be considered anywhere near middle class, but they were trying to help me and loved me.

The conclusion I came to was that bankruptcy was my only option. This will shock the FI / FIRE community. And likely upset some people, but as someone who is permanently and totally disabled without the ability to make sustainable gainful income, paying off the debt was not going to happen, and the emotional turmoil and stress was not helping myself, or my family.

Let me tell you, while I had a lovely attorney, bankruptcy was horrible. I watched everyone else do their case in two minutes. I was up there for ten. The man attacked me. He was vicious in his language. Told me he would go after my parents because I had made payments (as I had promised) on a student loan my mother had taken out for me in her name. That that money did not belong to them, but my debtors and that he was going to sue my parents for it. I was bawling, struggling to breathe, nearly hysterical by the end. I’m sure it terrified everyone else waiting for their turn.

Finally, my attorney yelled at me to stop crying because asking quietly was not working. She told me he was just mad because I had filed a waiver for the fee to file bankruptcy and that was where his income came from. I had cost him a fee. My attorney told me he would never go after my parents, and that finally – to get me to shut up – if he did, she would pay it. That was how confident she was. I stopped crying.

That is not the end of that tale, as I was ultimately sued by the private loan companies when they found out three years after the bankruptcy that I was in a car accident that may result in a small settlement.  They took it all the way to trial.  Testifying was the worst experience of my life.  The year leading up to it I was sick with anxiety and gained almost 50lbs.  I will tell anyone to this day: Had I known what that was going to be like?  I would have paid.  I don’t care how.  I would have paid.  It was not worth it.

I still had the student loan in my mother’s name, but other than that I was debt free.  Living in my parent’s home, with my parent’s footing my medical insurance and most of my upkeep.  At least with that $625 I could cover all my copays and medications and contribute to the family who had spent so long supporting me.

Elephant in the room: SSDI (Social Security Disability Insurance.) Part One.

Social Security: Part 3 – Working

Social Security Part 4: Guilt and Shame

Social Security: Part 5 – Medical/ Medicare