How Years of Caregiving Led to Bankruptcy

Still, even with $8,000 a month coming in through his pension, Social Security, LTC insurance and VA benefits, a big monthly shortfall arose.

In the last years of Dad's life, his medical expenses alone were over $10,000 a month, including more than $90,000 per year just for paid caregivers, even though I was also providing 60 to 80 hours of unpaid care most weeks. I paid for almost everything else — the house, food, clothing, incontinence supplies, his service dog's medical care, and other things that enhanced Dad's life and made it easier to care for him.

We took a home equity line of credit to consolidate some debt and pay for remodeling the bathroom to make it safer for him to use.

Drowning in debt

My sisters, Linda and Susie, and I all made personal and financial sacrifices, but, like many other primary caregivers, I carried the bulk of the financial burden.

I used my credit cards for expenses that exceeded my income, which I eventually stopped doing. But even though I wasn't adding to it, the debt continued to grow due to high interest rates.

I desperately tried to reduce the amount I owed. As our expenses continued to rise, I began paying only the minimum balance on credit cards (which I knew was not a good idea, but I had no choice). The debt grew even faster.

Dad passed on at home, surrounded with love, in 2018, at age 94. It was six years after he had moved in with me. Life after caregiving proved to be harder on every level than I thought it would be.

Bankruptcy: the hard reality

I tried to manage my debt, but I was financially overwhelmed. The credit card companies were not interested in negotiating with me. Several lawyers and financial experts advised me that bankruptcy was the best course. For me, it's been a long, humiliating, demoralizing and stressful process.

I can tell you that when the bankruptcy was final, about a year and a half after filing, there was a level of relief mixed with grief, sadness and despair. Today, I still continue to pay taxes that I got behind on the year I filed (at 8 percent interest), as well as the ongoing mortgage and the home equity line of credit.

My credit rating will be low for years to come. 

I realize that few people talk about their finances and that doing so makes me vulnerable. I have endured much criticism and judgment, even from family members and friends. I own my choices to care for my family. I do not need nor want sympathy.

I do, however, want people to understand the real costs of caregiving. An AARP study found that family caregivers spent about 26 percent of their annual income on caregiving costs — an average of nearly $7,000 of their own money per year (in my experience, those costs were much higher).

I share my story because I want the 53 million family caregivers in the U.S., many of whom are struggling financially, to know that they are not alone.

When I began intensive caregiving for my parents, I had about 25 years of experience working in the field of aging. I did my best to give my family the best care and support. But the finances were far more difficult than I imagined. While my situation may be extreme — with multiple people to care for and differing extenuating circumstances — the unimaginable can happen. The cost of caregiving can be too much for anyone.

A lasting impact

Looking back, nearly 7 years after Dad died, there’s not only a lasting impact on my finances, but also my stress levels and sense of security.

While many of my friends are beginning to retire, I know I need to keep working as long as I can. I love my work, and I feel lucky to have it; I hope I can continue to do it for many years. But it doesn’t feel good to know that, should I need to retire, I wouldn’t be able to keep up with expenses.

I still haven’t built up enough cash reserves to fully bridge a permanent or temporary drop in income — when a client payment came in late recently, I had to borrow money from a friend until my pay came through. As is expected with bankruptcy, my credit rating remains low even though I have many years of on-time payments.

However, I’m working with a good female financial planner who understands what I’ve been through and has been very helpful in guiding me toward financial security. She helped me create a viable financial plan to build an emergency fund, save for retirement and incorporate quality of life, such as vacations here or there.

After going over my financial situation, I asked her what she thought. She told me I had a great deal of work to do, but as long as I can keep working into my 70’s she can see a path forward. That gives me hope; I no longer feel despair.

Moving forward

Time brings perspective. When I worry about unexpected expenses, what my retirement will be like in the future, or how I will pay for caregiving help for myself if I need it, I go back to my plan. I can see that I’ve come a long way towards my goals, and I reassure myself that I just need to keep working the plan.

While many years of caregiving and bankruptcy still impact me, I’m grateful that I’ve been able to build a new life after intensive caregiving for multiple family members. It’s not the life I would have had if I had not chosen to care for my family, but it’s a good life, and I do not regret choosing to care.

I worry about my financial security — it’s always looming over my head — but my partner, Bill, is very supportive, and we have created a home together. I’m able to visit family regularly (including the great joy of spending time in Chicago with my great-niece, who was born a year and a half ago).

I’m grateful to have meaningful work supporting other family caregivers, which allows me to build back slowly and still live life to the fullest along the way.  

Bankruptcy is a terrible loss, and I did all I could to avoid it. But there is no loss as great as that of losing those we love so well. And how can we put a price on caring for loved ones while preserving their dignity and quality of life?

Caregiving is expensive and all-encompassing; one person cannot do it all. Although much of the time, I have had a good income it was still too much for me financially. Many family caregivers are more financially challenged than I have been.

We shouldn't have to make a choice between financial devastation and providing quality care. Many caregivers must stop working to care for loved ones; they suffer even more financially. Too many family caregivers are unprepared for their own future care needs because they depleted their own savings to care for loved ones.

We need to plan for caregiving, but it’s challenging to do. People are living longer but with chronic health issues. Alzheimer’s and other forms of dementia are on the rise, involving increasing needs over time and requiring many years of caregiving, as we experienced with Dad. My parents planned for their future but couldn’t have predicted their high long-term care costs.

I once read that an optimist is someone who takes two steps forward and one step back and figures out it's not a disaster — it's more like a cha-cha. So that's my goal. Overall, I keep moving forward; I work hard, and I am rebuilding my financial security. Many years of caregiving have taught me how to find joy despite high stress and to be resilient.

While the enriching knowledge that I did well by my family won't fill my bank account, it does fill and comfort my heart. And that's worth millions to me.

Here are some of the things I’ve learned

• Get help. I thought it was an expense I couldn't afford, but I wish I'd retained the services of a financial adviser for myself – not just for my parents’ finances – early on.
• Maximize loved ones’ income and services. My parents’ long-term care insurance was a huge help, and services and support from Veterans Affairs were critical for Dad, although I wish I had accessed them much earlier.
• Keep working and protect your resources. I was fortunate to have flexible full-time consultant work, so I never stopped contributing to Social Security, which will help in my retirement. I'm also glad I never tapped into my small 401(k) or pension from a previous job. If you are a working caregiver, ask about flexible work or paid leave.
• Don't “should” on yourself. I kept thinking, I should be able to manage this. But now I see that my situation was extreme: caring for multiple people, the adjustments I made in my life to do so, and the long haul after a stroke and Alzheimer's. I truly did the best I could with the knowledge, resources and energy I had at the time. I have nothing to be ashamed of.