I mentioned in my last post that quite often I am asked why people apply for a reverse loan and what are the most common reasons.
In my previous post I spoke about a client who had been using her credit cards to pay for her “cost of living” expenses, because her Social Security income was too low to get her through each month.
However, the downside to using credit cards, is eventually you use all of the credit available on them, but still have an ongoing payment that now cannot be met.
You can read about Sylvia and how we managed to eliminate that debt and give her additional money each month from a reverse mortgage in the previous post.
My next example is Bonnie and Jim ( No last name for privacy reasons) who had had a major medical disaster destroy their lives. Medical emergencies are probably the number one reason for causing personal financial collapse as no one is prepared for the medical expenses that come with aging.
He had a great career in the movie studios as a transportation driver and life was quite good for them until he developed diabetes.
Unfortunately like so many men, Jim ignored it and continued to eat and drink whatever he wanted and did not take care of his health. Needless to say he became very ill and almost died resulting in the loss of both of his legs and kidneys to the disease.
He was no longer able to work and they quickly ran out of their savings to pay medical bills and their regular ongoing monthly expenses and used up all of the funds that were available on their credit cards leaving them in a terrible, crushing financial situation.
They owed the IRS money, all the credit cards and ended up doing a Chapter 13 Bankruptcy but somehow managed to continue to make their mortgage payments and ultimately repaid the money they owed to the IRS
I was referred to them by a CPA and in spite of the ugliness of their credit and the bankruptcy, I managed to get them approved for their reverse loan, relieving them of the burden of mortgage payments, plus additional funds that they were able to receive at the close of Escrow.
Making their life just a little bit better.
Jim and Bonnie are doing very well as of this writing and even though their credit had been ruined, I was still able to get them approved for their reverse loan and help them move forward and into better circumstances.