Debt Bomb shell dropped on me

financialdisease · 11 April 2014 at 10:37PM

My other half Z has come clean about having massive debts that I had NO idea about

We both work for large financial institutions but clearly have the opposite attitude to debt, I can't believe that after 14 years together I failed to notice it. I have absolutely no debt, I manage my spending money and put a decent sum into savings account each month I honestly thought Z did the same. We have never had a joint account instead we pay different bills from our own account Z pays council tax, I pay the mortgage etc.

By accident tonight I discovered Z owed £6k to a credit card when I said that I knew Z told me that thinks owes around £32k!!!!!!!! has 4 credit cards all maxed out and a £10k loan with 2/3 years left to run and £1k overdraft. Z has never missed or been late with any payments but does cash withdrawals from 1 card to pay another, always minimum payments so debt isn't decreasing.

We don't have the income leftover after our normal bills to pay it back like I really wish we could, if Z continues to go the way is just now I can't imagine the outcome. £26k is Zs yearly salary mine is £9k we have a mortgage of £36k with12 years left on our house worth around £60. I don't know what his credit rating is like now mine seems okay. What are our options to get out of this. I know nothing about this and feel pretty lost and scared. Would bankruptcy or an iva be an option, a consolidation loan, remortgage aaghhhhh I was counting the years until I am mortgage free

Forgot to add that Z gets an additional car allowance of £5k a year we don't have a car its been wasted on debt repayments but knows now there will be big trouble unless we get a car asap that will have to be factored into the borrowing or budget.

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Tixy · 11 April 2014 at 10:46PM

Hi and welcome

I bet that was certainly a shock to you, but hopefully now you know he will be ready to tackle it and realise things cannot carry on as they are.

If he can only afford repayments by taking cash advances out then obviously that is not sustainable. I would suggest that he contacts one of the debt advice charities.

If possible before he does it might be worth him preparing a statment of affairs of his income, outgoings before debt repayments and a list of debts/aprs/balancecs/limits etc.

Do you know what the money has been spent on? Has he talked to you about how it has been run up? If its been on general overspending it probably needs a slightly different approach to if it has been something such as gambling or similar.

financialdisease · 11 April 2014 at 10:58PM

He claims that it has been a general mix of overspending and goes through bouts of gambling and drinking, I can't understand he never gets drunk I know he goes to the pub but I always imagined a few pints and a couple of pounds in the puggy machine. I don't drink so know nothing about pubs, I can't see anything significant that has been spent on. He transfers £500 a month toeme which pays for Christmas/birthdays/holidays sometimes nursery fees if the month is long. I had no idea, im really laid back person so there has been no big drama or argument I wish I was the type to shout and be angry because I feel he deserves it! I booked me and the kids a holiday today all from my own money I won't use the house fund because he's not coming now I understand why he refuses to come said something about feeling guilty. He thinks he can afford to make repayments of around £250-£400 a month depending on what happens with the car

financialdisease · 12 April 2014 at 7:57AM

Ggggrrrr I can't sleep, im normally a great sleeper from 10pm-8am every night with this going round in my head it was after midnight before I stopped reading threads here and I have been awake since 7am! I need figures, I need to know exactly how much he owes to what and what he pays out monthly to try to make some sense of it and our way out. He is going out today all day (I don't have a problem with it) I am thinking I should ask him to leave me his Internet banking passwords and log in details, but im worried about bow to say and and should I ask? Our finances have always been separate it feels like prying.

hettiecarro · 12 April 2014 at 8:42AM

Hi
I understand you are in shock at the moment.
Find out the figures from your OH and post a SoA on here for some great advice.
What was your OH's reaction when you confronted him? I ask this because if he is equally worried then getting advice from a debt charity will be easier for you both. I think you need to find out if there is a genuine gambling/drinking problem, as he may need professional help to tackle those.
In the meantime, try not to worry. Martin always claims that there is no money problem that can't be resolved with will, strength and determination - and I must admit, that over the 5 years I have been on this forum dealing with my own debts, I have never seen a post or advice that says differently.
You sound as though you are a close unit, and therefore if you support each other you will get through this.
Link for SoA below.
Fill it in, preferably with OH's help and you will be amazed how much advice will flood in.
However - it IS important to get in touch with one of the debt charities such as 'Stepchange' because borrowing cash on a credit card to pay others will cost an astronomical amount in interest.
http://www.stoozing.com/calculator/soa.php
When you fill this in, don't be too daunted. Often it is hard seeing it in black and white - but remember this is your first step to becoming debt free.
Your OH is lucky to have you for support - particularly as you are 'good with money'.
When you fill in the SoA, make sure you account for EVERYTHING - it's often the things that crop up unexpectedly (vets bills, broken boiler etc) that throw us off kilter. Forewarned is forearmed as they say.

Finally - Not being patronising - but well done again for seeking assistance.:)
Hettie

fatbelly · 12 April 2014 at 8:42AM

Tixy's advice was for him to do a statement of affairs as a first move

There's a calculator here:

http://www.stoozing.com/calculator/soa.php

Either he needs to do it or you work on it jointly. This site is anonymous so he may want to post it here (in which case, use the 'format for mse' button).

We can then help with the options. To me it looks like a debt management plan or an IVA (consolidation doesn't work and we don't recommend turning unsecured debt into secured debt).

Another option would be to approach one of the organisations in Martin's list. Of course he can do that in tandem with posting here if he wants to.

In any case there is a way forward as long as he acknowledges this as a problem that needs to be dealt with. Two main issues will be controlling expenditure and freezing interest.

P.S. Cross-posted with hettie and bear. Excellent posts both!

Upsidedown_Bear · 12 April 2014 at 8:43AM

financialdisease wrote: »

Ggggrrrr I can't sleep, im normally a great sleeper from 10pm-8am every night with this going round in my head it was after midnight before I stopped reading threads here and I have been awake since 7am! I need figures, I need to know exactly how much he owes to what and what he pays out monthly to try to make some sense of it and our way out. He is going out today all day (I don't have a problem with it) I am thinking I should ask him to leave me his Internet banking passwords and log in details, but im worried about bow to say and and should I ask? Our finances have always been separate it feels like prying.

I understand that you need to know what is going on but asking for passwords is not a good idea.
You should never share passwords/pin numbers or anything similar with anyone. It is against the terms and conditions of having bank accounts/bank cards etc.

I'd suggest you both fill in a Statement of Affairs. Link here:
http://www.stoozing.com/calculator/soa.php

Feel free to post it here for comment.
As Tixy says he needs to contact one of the free debt charities for advice.
https://forums.moneysavingexpert.com/discussion/4228011

financialdisease · 12 April 2014 at 9:09AM

Thank you for taking the time to reply.

I have asked for a full and exsct list of what comes in and goes out he has just given me a post it note which roughly shows inc debt repaymentcome to 00 in and £2100 going out.

His cards are the bulk at £24k I can get a loan for £25k at 5.6% over 72 months £409 a month he can't see it working because he NEEDS a car asap or could loose his job, paying the big loan and his own £10k loan at £266 a month and a car payment just isn't affordable.

I don't think we can remortgage because of the loan to value thing and the house isn't worth enough to justify it.

He is very worried about anything like iva, would be trust deed because we're in Scotland effecting his job, he is convinced it will be instant dismissal.

I have said that Monday hr has to phone Halifax for a settlement figure on the lian and all the credit card companies for exact balance he doesn't keep or look at statement so doesn't have the right figures.

I am seriously hoping he has over estimated!

Upsidedown_Bear · 12 April 2014 at 9:17AM

financialdisease wrote: »

Thank you for taking the time to reply.

I have asked for a full and exsct list of what comes in and goes out he has just given me a post it note which roughly shows inc debt repaymentcome to 00 in and £2100 going out.

His cards are the bulk at £24k I can get a loan for £25k at 5.6% over 72 months £409 a month he can't see it working because he NEEDS a car asap or could loose his job, paying the big loan and his own £10k loan at £266 a month and a car payment just isn't affordable.

I don't think we can remortgage because of the loan to value thing and the house isn't worth enough to justify it.

He is very worried about anything like iva, would be trust deed because we're in Scotland effecting his job, he is convinced it will be instant dismissal.

I have said that Monday hr has to phone Halifax for a settlement figure on the lian and all the credit card companies for exact balance he doesn't keep or look at statement so doesn't have the right figures.

I am seriously hoping he has over estimated!

If you earn £9K a year as you say in your first post you will not be able to get a loan for £25K.

Even if you can borrow money to pay his debt please think very very carefully about doing it.
There's nothing to stop him running up debt again if it's paid off for him.

giblet1979 · 12 April 2014 at 9:35AM

Hi,

I just wanted to second the above post. It must have been a shock for you, and I'm very sorry it had to happen, however I would be very careful about taking out a loan to pay off debt at all, nevermind for someone else.

I'm only new here, but have had past experience of paying off debt for a relative, only to be asked again at a later date (and called the 'bank of gib' for my trouble). There are lots of ways to manage debt, and this site is full of people who have been there, in very difficult situations, but have managed to overcome. There will be a workable solution.

Stepchange debt charity can't be more highly recommended by me for giving sound advice and support, and taking the pressure off. I think if you and your partner work through this together, and get a budget together and really stick to it, that will be the answer . A SOA as previously mentioned would be helpful.

Your partner needs to be involved and on board however, and may need professional help if the gambling / alcohol is more of a problem than perhaps he is ready or able to admit? He has to take responsibility though, or with the best will in the world, it may continue to happen.

I wish you lots of luck, and if there is anything I can help with, I will try to.

longtermplanner · 12 April 2014 at 9:39AM

My sympathies. You must be in shock as much at the deceit as the actual debt problem.

Only you can know if you are going to be able to work together to sort this all out or if this might mean the end of your relationship. But FWIW, after such a long time and with a family and house with equity, it's worth giving it your best try over the next few months or a year.

An SoA is the best place to start. It has to be realistic - you can't live without new clothes or a bit of spending money over the time it will take to clear those debts.

It might help if you draw up two separate SoAs and a joint one. I'm not saying you should clear his debts, but you two have a huge joint problem even though it is mainly of his making. I am afraid my first thought is that you should cancel that holiday, not only is the money needed elsewhere but it seems cruel if his is really making an effort to change.

If he isn't making an effort to change, then you need to rethink your relationship.

It is possible for you to increase your income?

Debt Bomb shell dropped on me

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