Hello, and thank you to anyone who can share advice to help my neighbor.
Background:
My neighbor, who is 57, is on disability and requires 24-hour oxygen support.
A few years back, both her father and mother passed away. Her sister, who was also on disability, lived down the street in a house that was fully paid off.
My neighbor had been her mother’s caregiver and lived in the family home, which she thought was paid off. However, after her mother’s death, she discovered that her late father had taken out a reverse mortgage on the house. My neighbor was faced with the option of paying it off or losing the home to foreclosure. Unfortunately, since she wasn’t old enough to take over the payments, she had to obtain a new mortgage of approximately $65,000 through Rocket Mortgage.
After this, her sister sold her own house and moved in with my neighbor. They got along well and were practically living together anyway, so it made sense. Together, they were able to comfortably manage the mortgage and bills.
Sadly, her sister suffered an aneurysm and passed away, leaving my neighbor a life insurance policy of around $40,000. After covering burial and headstone expenses, about $30,000 remains in the bank.
My neighbor doesn’t have any other outstanding debts, such as credit card or car loans. She owns her car and her sister’s truck, both of which are in good condition. The issue is that her monthly expenses exceed her Social Security income by about $400 each month.
She looked into filing for Chapter 13 bankruptcy but found that it wasn’t a viable option.
She’s concerned that her savings will quickly deplete since she’s running a deficit every month.
Does anyone have any suggestions? She’s really worried about losing the house she grew up in.
If your neighbor has no debt, why would she believe that filing for bankruptcy will help?
What bills does she have each month? Can she cancel any memberships or services (streaming, etc.) that she isn’t using?
Why does she not sell the cars? perhaps lease one of her spare rooms?
If she has thirty thousand dollars, she should budget her money and place it in a high interest savings account.
She’s not very knowledgeable about financial matters and recently saw a “debt relief” commercial on TV. Honestly, I’m just trying to make sure she doesn’t end up sending all her money to people like Jimmy Swaggart, hoping they can pray the debt away.
I’m not sure of her exact income and debt amounts just that she’s at least $400 short each month. This is based on our conversations, as I don’t want to get involved in her personal finances.
There are a few things she could potentially cut back on, but she doesn’t really have any luxuries. Taking away something as simple as her basic Dish TV would make life even harder, and sitting in a dark house isn’t an option.
Selling one of her vehicles would only buy her a few more months and not solve the issue long-term.
We live way out in the countryside, and no one else would want to live in this house.
It’s too late for investments, as locking up her money would only reduce her monthly cash flow, putting her at risk of losing the home.
I’m financially stable, own everything I have outright, and am debt-free, but I don’t have any experience with debt relief programs hence why I’m seeking advice.
Saving money in a high yield savings account doesn’t “lock the money” up or involve investing.
Selling the cars would be beneficial.
Once more, you inquire about debt relief programs even if the only debt she has is from her mortgage and monthly household expenses.
You don’t seem to be financially literate, or otherwise you would be aware of these fundamental ideas. Jesus.
She might have to sell and relocate. Consider taking in a roommate, but that comes with its own set of challenges.
It would be best if she sold the truck.
Certain communities offer elder assistance programs for utilities.
Does your neighbor have any adult children who could assist her with this? It sounds like she could benefit from having someone financially savvy to help her out, like a financial planner who can help her come up with a plan to boost her savings and manage her finances.
She probably doesn’t need both her car and her sister’s truck. Selling one could save her on auto insurance costs and provide her with some extra cash. She also could have saved on funeral costs by opting for cremation instead of burial, but it’s too late to change that now.
You might want to look for a reputable financial planner with experience working with elderly clients to help her out.