More and more Americans are drowning in debt and turning to bankruptcy court for relief. As a group, people over 65 have the distinction of having not only the fastest growing home debt, but also the fastest growing share of personal bankruptcy filings and the biggest growth in demand for credit counseling. Recent studies show that over 82,000 Americans 65 or older filed for bankruptcy this past year, up 244% in the past 10 years, according to the Consumer Bankruptcy Project, a study done at Harvard.
The United States Department of Justice, which runs the federal bankruptcy trustee program, released a study that painted a grim picture of the future for many older Americans.
The Justice Department concludes that although the elderly are less likely to file Chapter 7 bankruptcy than younger people, a significant number of them do file each year. The number of elderly filers is likely to grow in the coming years.
A reverse mortgage can be done if the borrower(s) have filed bankruptcy and it has been discharged. In some cases, the bankruptcy can be paid at closing. Call Kaye Financial if you have filed bankruptcy. Our experience as one of the top a reverse mortgage lenders in Michigan will advise if a reverse mortgage can work for you!
As stated by a professor at Cornell University, “more than 620,000 elderly households could be raised above the poverty line if they obtained a reverse mortgage”.
Reverse mortgages generally must be “first” mortgages, that is, they must be the primary debt against your home. So if you owe money on your property, you generally must do one of two things:
- Pay off the old debt before you get a reverse mortgage; or
- Pay off the old debt with the money you get from a reverse mortgage.
Posted by Ted Cantu on April 9, 2008 at 12:54 AM and can be found at http://www.1seomichigan.com