📋 Find Out How a Spouse's Death Can Impact a Credit Score (AARP Article)

Forum|Forum|1 year ago
September 18, 2024
5 replies
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FROM THE ARTICLE - SEE ARTICLE FOR MORE!!!

How a Spouse’s Death Can Affect Your Credit Score.

Survivor’s credit can take a hit, especially if late partner handled the couple’s money.

By Jon Marcus, AARP. Published September 17, 2024.

Soon after Dolores Tighe’s husband died in December 2023, her grief began to be punctuated by letters from banks and calls from strangers asking questions about her finances.

Tighe, 78, threw away the letters and hung up on the callers. “I honestly didn’t know who they were,” she says. “And I didn’t want to give out information on the phone."

https://www.aarp.org/money/budgeting-saving/info-2024/spouse-death-credit-impact.html

SummerOnTheWay1Author

This is reality and sad that folks who are grieving, often with an UNEXPECTED loss - have this to deal with.

I wish there were MORE laws out there as society is seeming to lose COMPASSION for fellow humans.

Yes, bills need to be paid but work with the grievers.

Now there have been places like Electric and Water Companies who were COMPASSIONATE. Thank you!!!

We need more....

Nicole 🤗🤗🤗

GailL1

Community Champion ⭐⭐⭐

@SummerOnTheWay1 wrote:
This is reality and sad that folks who are grieving, often with an UNEXPECTED loss - have this to deal with.

I wish there were MORE laws out there as society is seeming to lose COMPASSION for fellow humans.

Yes, bills need to be paid but work with the grievers.

Now there have been places like Electric and Water Companies who were COMPASSIONATE. Thank you!!!

We need more....

Nicole 🤗🤗🤗

Like the expert that was quoted in the article said . . . . “ You’ve got to plan for that fog now, because you’re not going to be able to think in that period.”

There was nothing in the article that couldn’t be learned and handled before it got to the point of affecting the widow or widower. All it takes is knowing about financial stuff and sharing with the other spouse the finances of the household even if only one of them actually handles the financial matters of the family - the other one should stay in the know cause it is their responsibility too.

I believe I shared a few years ago about an elderly couple who were getting a large part of their retirement income from a reverse mortgage. Problem was the husband was the only one on the deed, and the reverse mortgage. So when he died, the reverse mortgage income stopped and the widow was notified that if she wanted to remain in the home, she would have to pay off the reverse mortgage which her husband had taken out and then she may be able to secure one on her own - but she couldn’t because there was too much overall debt - credit cards, auto loans, personal loans, - which she didn’t have the money to pay off without the income the couple had before his death and there was very little other savings of any type. It was a mess - then she had to secure a lawyer just to help her file bankruptcy.

That’s why it is so important to be in the know on family financial matters and make sure that the family’s interest and liabilities are clear to both parties in the marriage.

It is heartbreaking for a member of a married couple to suddenly realize that their income is suddenly reduced, sometimes drastically, when one of them dies. It's a real awakening but not one that couldn’t have been realized years earlier and perhaps plans made to rectify it or at least help the situation somewhat.

In a relationship such as marriage where so many things are shared, finances should be one of those shared things even if one is only signing on the dotted line with all the terms and conditions of any debts or liabilities.

Compassion from a lender might last a short while, the bills still come due or pay the consequences of signing on that dotted line. But being knowledgeable and having a plan beforehand would make this whole BIG change much less stressful for the longterm and may help preventing financial ruin.

IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna

GailL1

Community Champion ⭐⭐⭐

@allreverse

Of course, this could have been handled better in a variety of ways - Yes, I am glad that some of the reverse mortgage rules have been updated to cover situations such as this - when the spouse is not listed on the reverse mortgage. HOWEVER, this does nothing to help them in their financial situation depending upon how the reverse mortgage was set up and how far they were into it when the death of the lender spouse occurred.

Seems to me, it would be a much better alternative if they have a substantial amount of equity in the home to get a line of credit based on the maximum equity - of course, the amount they draw to live on would not be tax deductible like it is now but at least they could control how much they draw if any at all.

I think reverse mortgages are terrible financial instruments to place upon couples who need this income to live on - it is only postponing the inevitable.

They could sell the property and pick a place to live that is much easier and cost efficient to deal with in their older age.

So when friends ask me what they should do - we sit down and look at how the reverse mortgage works for them - including the how much and what happens when one of them passes - then we look at other methods to which they may be able to gain access to their equity, We also look at the other alternatives of selling and moving someplace where the house expense is non-existent.

All of this needs to be taken into consideration by them instead of just the amount of added monthly income they are getting. It all has to be paid back somehow / some way. The plans should also be evaluated in the event that one of them dies or has to go into a long term living situation.

A bird in hand is not always the best way to solve a problem especially if the problem is just masked by the bird.

IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna

GailL1

Community Champion ⭐⭐⭐

@allreverse wrote:

Selling and downsizing is definitely another viable option for some, but it’s not always ideal for those who want to stay in their home and maintain community ties. Ultimately, it’s about weighing the pros and cons based on personal priorities.

——————————————————————-

Name JUST (1) situation where it is a good idea to get a reverse mortgage for adding to ones retirement income to make ends meet.. I’ve looked, I’ve thought about it - there isn’t one - somebody has to pay the piper with a reverse mortgage.

The problem is what somebody “wants” is not always the best way. And that has to be shown to them rather than just showing them the benefits of getting the money from a reversed mortgage.

Reverse mortgages are just another way of continuing the “I want it Now” philosophy of money handling. Except this time it has a clause of no return built into it so that no amount of credit problem undoing will ever work. Reverse Mortgages are a financial death spiral especially for those who need the income to make ends meet.

One or both of them, if a couple, will face some adversarial conditions later in their life for doing this when something else would have been a better alternative.

I have never found one that would justify the cost nor the conditions. They are BAD products for those who are retired and need this money source to make ends meet on a regular basis as a reverse mortgage would supply.

IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna

SummerOnTheWay1Author

[Sunday 8/2/26]

OUR Gail @GailL1 added her thoughts with mine (Nicole).

It is very important to know how to handle OUR credit after losing a spouse.

WE would luv to hear YOUR comments on this article & topic.

Maybe READ what other members have posted.

Grief & Loss Team ‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌🤗‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

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