I was involved in a work accident that left me disabled and recently received a lump sum of $185,000, after deducting attorney fees, etc. In 2011, when I was injured, I was facing foreclosure and could not care for our minor children, so life for me fell apart. In 2014 I started taking out disability insurance.
During our divorce, “Jim” made several requests for the support of our two children. Since I didn’t have money to hire a lawyer to defend myself, I answered one motion and let everything go because I was recovering from major spinal surgery and couldn’t handle the stress. In 2014, the judge awarded me $17,000 in tuition.
Jim has earned $140,000 per year for the past ten years. I have an income of $28,000 a year plus a two-hour-a-day job that I took for extra money. I have limited mobility and cannot sit or stand for long periods of time. In 2017, my lawyer lost a case when he fought for a change of circumstances. Jim took me to court and won a $78,000 settlement against me.
“‘I have limited mobility and cannot sit or stand for long periods of time.’”
I’m facing a $107,000 bill for care that Medicare won’t cover — expenses like hiring an assistant and possible future legal bills if the provider refuses to approve the care, plus maintaining a home that costs $20,000 to $30,000 in upkeep needs because I have not been able to maintain an income that would support living in the highest taxed state in the country.
I have $193,000 equity in my house and owe $140,000. In my city, monthly rents start at $1,700. Currently, I pay $1,340 a month in mortgage payments, and the bills total $3,200, if I keep things tight. I will receive $2,600 after Medicare deductions. I have a 2010 Honda with over 100,000 miles on it and where I live you can’t live without it.
I am 64 years old, suffer from daily chronic pain and require lifelong comprehensive pain management. Life, I might add, is not easy. I have low credit card debt ($2,000) and property taxes are frozen at $6,000 per year on my 1,000 square foot property. Are there words of wisdom to calm my fears of financial collapse?
Trying to stay afloat
Best try,
The first thing you can do to avoid a financial collapse and an emotional collapse is to make a plan to deal with it one day at a time. Listing all your challenges in one letter and treating them as one big mountain to climb will only lead to more anxiety and feelings of hopelessness. You’ve come a long way. You still have a long way to go, but you can do this in 24 hour periods, one step at a time.
If you have more legal problems with your husband, look into free legal aid. Your state’s bar association or local legal aid office should be able to give you advice on where to get personalized advice from a financial advisor. Pay off your high-interest debt (like your $2,000 credit card debt) and mortgage first, and look for ways to reduce your monthly expenses.
The National Foundation for Credit Counseling is a nonprofit financial counseling organization that can help you create a budget. American Consumer Credit Counseling also helps people in your position. There are 12-step support groups, including Debtors Anonymous, that provide a safe space to talk about your background and hear the stories of others.
You might also consider taking in a roommate and exploring a reverse mortgage on your property, says Cary Carbonaro, senior vice president and director of women and wealth at Advisors Capital Management in Winter Garden, Florida. Also known as Home Equity Conversion Mortgages, reverse mortgages are loans available to homeowners who are 62 years of age or older.
“You may also consider taking in a roommate and considering a reverse mortgage on your property.”
Reverse mortgages allow you to tap into the equity in your home. They are called reverse mortgages because the lender pays the borrowers, not the other way around. To qualify, you must own your home outright or have a mortgage balance low enough to be paid off with reverse mortgage proceeds. If this doesn’t work for you today, this may be an option in the future.
They are popular among seniors who have equity in their homes and may have debt or investment losses in recent years. According to U.S. Department of Housing and Urban Development data compiled by NRML, 27,397 reverse mortgages have been processed so far this year, up from 64,489 for all of 2022. In 2009, they peaked at nearly 115,000.
Research senior support services in your city and state that offer everything from transportation to medical appointments to Medicaid waivers, where seniors can receive home care instead of being admitted to a hospital. New York state, among others, has food delivery services for people who have difficulty preparing their own meals.
Every aspect of your financial life should be assessed in order of importance, and whether it is a short-term or long-term goal. All the pieces together seem insurmountable, especially if you have chronic pain. Enlist the support of your children and/or friends for advice. You don’t have to go through this alone. The best compliment you can give someone is to ask them for advice.
“All the pieces together seem insurmountable, especially if you have chronic pain,” the money specialist answers. “Enlist the support of your children and/or friends for advice. You don’t have to go through this alone.”
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