Medical Debtors to the Poorhouse.

• Author: Olson, Matt
• Position: Credit card companies singing all the way to the bank

Leona Kaliser of Philadelphia survived ovarian cancer and congestive heart failure. And though she received disability insurance, her health insurance didn't cover all of her co-payments and deductibles. "I have to go for a lot of different tests and blood work. And I have to see a lot of doctors every couple of months, or more often when I have problems," she says. "And when my out-of-pocket money was depleted, I went to the credit cards."

She dutifully paid her bills, exceeding the minimum "whenever I had a little savings." But when her disability insurance ran out and her pension kicked in, her income plummeted, and she could no longer meet her minimums. During that whole time, she continued to receive solicitations for more credit cards--as many as ten in a day. "I would tell the people, `This is silly, I can't afford to pay you, and I don't need more credit,' but they kept calling."

Kaliser's situation is not unusual. Nearly half of all bankruptcies in the United States are the result of medical debt. But the bankruptcy bills the House and Senate passed this spring would make it harder for people like Kaliser to declare bankruptcy--and make it easier for creditors, including credit card companies, to force repayment.

"Whenever we talk about credit card debt, there's an assumption that credit cards are used to buy a fur coat on the way to the bankruptcy court," says Melissa Jacoby, a Temple University law professor. "Credit cards are very often used to finance the purchase of medical supplies and medical care and the like."

Credit card companies increased the credit they extended nationally by 17 percent last year and sent out 3.3 billion solicitations--about a dozen for every man, woman, and child in the country.

"Credit card issuers are brazenly lobbying for new bankruptcy restrictions at the same time their aggressive marketing and lending practices are pushing many families closer to the financial brink," says Travis Plunkett, legislative director for the Consumer Federation of America. "While the issuers urge Congress to deny families access to bankruptcy relief, their profits are soaring."

"Why don't we call on the credit card companies to be accountable?" asked Senator Paul Wellstone, Democrat of Minnesota, during debate on the Senate bill this spring. "They need to be held accountable for their predatory lending practices."

Unfortunately, credit cards are often the only available route when medical bills mount. "What we see are...