Poor has always been relative and had extremes. Her story sounds like the upper end of poor [1]. They had no cash, stuck with a mountain of debt (relative to their significantly reduced income) and two children in poor health, all on $25k per year income. In the US, that's poor.

[1] Meaning, with resolution to their house situation, they might've been ok. But that's a huge expenditure each month with a risk of homelessness if they fail to make the payments.