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 couldn’t care for our minor children, so life for me fell apart. In 2014, I began receiving Social Security disability insurance.
During our divorce, “Jim” filed several motions for child support for our two children. Having no money to hire a lawyer to defend me, I responded to a motion and dropped everything because I was recovering from major spinal surgery and could not couldn’t handle the stress. The judge awarded me $17,000 in tuition fees in 2014.
Jim has earned $140,000 per year for the past 10 years. I have an income of $28,000 a year and a two hour a day job that I took to earn some money. I have limited mobility and cannot sit or stand for a long time. In 2017, my attorney lost a case fighting for a change of circumstances. Jim sued me and won a $78,000 settlement against me.
““I have limited mobility and cannot sit or stand for a long period of time.”»
I’m facing a $107,000 bill for care that Medicare won’t cover – expenses like hiring an assistant and possibly future legal fees if the provider refuses to approve the care, plus l maintaining a home that requires between $20,000 and $30,000 in maintenance because I haven’t been able to maintain an income that would allow me to live in the highest taxed state in the country.
I have $193,000 in equity in my home and owe $140,000. Monthly rents start at $1,700 in my city. Currently, I pay $1,340 a month in mortgage payments and the bills total $3,200, if I’m careful. I get $2,600 after Medicare deductions. I own a 2010 Honda with over 103,000 miles on the clock and where I live you can’t live without it.
I am 64 years old, suffer from chronic pain daily and require extensive pain management throughout my life. 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 for my 1,000 square foot property. Any words of wisdom to ease my fears of financial collapse?
Trying to stay afloat
Cher Trying,
The first thing you can do to avoid financial collapse and emotional collapse is to make a plan to deal with it one day at a time. Describing all of your challenges in one letter and treating them as a big mountain to climb will only lead to more anxiety and feelings of hopelessness. You have come a long way. You have a long way to go, but you can do it in 24-hour periods, one step at a time.
If you have more legal issues with your husband, consider free legal help. Your state bar or local legal aid office should be able to give you advice on where you can get in-person advice with a financial advisor. Pay off your high-interest debts (like your $2,000 credit card debt) and your 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 budget. American Consumer Credit Counseling also helps people in your situation. There are 12-step support groups, including Debtors Anonymous, providing a safe space to talk about your background and hear the stories of others.
You might also consider taking on a roommate and considering 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 aged 62 or older.
“You may also consider getting 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 or have a mortgage balance low enough to be paid off with the reverse mortgage proceeds. If this doesn’t work for you today, it might be an option in the future.
They are popular with seniors who have home equity, who may have debt or losses on their investments in later 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, compared to 64,489 for all of 2022. They reached a high of nearly 115 000 in 2009.
Investigate senior support services in your city and state that provide everything from transportation to medical appointments to Medicaid waivers where seniors can receive care at home rather than 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 evaluated in order of importance and whether it is a short-term or long-term goal. All of these seem insurmountable, especially with your chronic pain. Get support from 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.
“It all seems insurmountable, especially with your chronic pain. Get support from your children and/or friends for advice. You don’t have to go through this alone.
Illustration from the Market Observatory
Readers write to me with all kinds of dilemmas.
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The Moneyist regrets not being able to answer the questions individually.
More from Quentin Fottrell:
Do children get 529 accounts in divorce? My in-laws have opened two projects for our children, but their marriage is in ruins.
My husband and I have $6 million in retirement and no debt. What do you recommend to the couple who has everything?
Our oldest son, 37, is an artist and puts $1,000 a month on our credit card. Our other son, 35 years old, is independent. Is this unfair?
2023-09-18 11:53:31
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