Help! Debt and argueing £40K credit cards

Kate_Smiley

Hello, please reply as it would help even if its just to say it happens, and we can sort it out. :hello: :eek:

We have a lot of debt, £35,000 on credit cards (14.9-16.9% APR), £8,000 overdraft on current accounts (6% APR) and £125,000 on the joint morgage (6% APR). At the moment we are only paying interest, so its going up not down. How can he borrow enough money at a low enough rate so that we can start to pay of the debt?

Mainly its my partners. He always had a lot of debt and has always spent on credit on what he wants, as long as he can pay the credit bill. Only now he is worried as his credit card debt is about equals to his net annual salary and he is worried about possible redundancies, meaning he cannot pay the bills. However I cannot deny that I have eaten the nice meals etc, but at the time did not know that he could not really afford it and that it was all on credit.

He wants to consolidate this debt into our joint mortgage. I want to find a different way as this debt really scares me. The pressure and arguements are affecting our relationship.

Our mortgage is joint, and the rate is quite high, about 6% but while we cannot agree whether to roll the debt in or not, we are paying the high rate, and might not be able to remorgage if he loses his job. It is causing resentment that I am delaying the re-mortgage, as the debt is in his name and I don't want to put it into our joint mortgage. I would need to feel very secure in our long term financial and relationship security to do that. And I don't think he has changed his spending habits enough, and don't want it to be brushed under the carpet (or the mortgage) so that it can happen again.

I only use credit as for cash flow or as a last resort. I never had any debt before we were together. If am on a low salary, or not earing, I don't spend what I don't have. We have been living together 6 years. In that time, I was poorly and did not work much for about 15 months, and had to take low salary for a couple of years to get over it, but am on a good salary now. My whole salary is going into the joint account and disappearing into the debts. I feel out of control, and unable to spend anything, even though I am earning a good salary.

The whole time he was on a very good salary, and some of the debts have been consolidated and consolidated over more than 10 years, well before he new me.

I was thinking of buying a pre-registered car, which he is pushing me to do. We live in a village, and need a car to work, and my old one was getting a bit unreliable. But with so much debt, and concern that my work contract is up for renewal in mid March, I think I will have to cancel that, as I am getting more and more stressed. I will service my old car. I feel should not have to go without because he has had all the things he wanted (including his second new car), but that it would be irresponsible to spend more money now.

We have been together since '94 and lived together since '99, but money is a constant area for arguement as we think and act so differently.

Please post a reply!

1. How to start reducing the debt? OR
2. How to stop argueing about it? OR
3. Just to let me know we are not loons or alone!

Thanks for the chance to get this off my chest! And Happy New Year!
Kate

tomstickland

Ah, I've replied to your other post: http://forums.moneysavingexpert.com/showthread.html?t=130878
Maybe they can be merged.

You're not unusual; there are many, many similar stories on here, all slightly different of course.

I think you need to get him to face up to the reality of the financial situation. Buying new or nearly new cars is just more money going out. If he realises the true situation then hopefully you can both formulate a plan with the goal of eradicating the debt. Once you have a plan then you'll feel a lot better.

In the usual style of debt free wannabe, it's good to post a Statement of affairs. This is a list of all of your income and expenditure, so the amount you have available per month can be deduced. There are many, many ways of cutting expenditure. Once the basic numbers are available then various options can be suggested.

The basic idea is:
-start by knowing how much debt there is, at what rate, and how much money is coming in & going out, so you can work out how much can be put to debt clearance
-move as much debt as possible to 0% or low APR rates
-minimise expenditure so you can throw max money at the debts

GettingThere_2

Hi Kate

YOU'RE NOT ALONE!!!!

Your story sounds a tad familiar - I used to bury my head in the sand and hope everything would sort itself out, and my wife (the sensible one) tried to get me to do something about it, but I wouldn't. Bills used to remain unopened and we stopped answering the phone. Eventually she asked her employer (the bank manager!) for advice - he said we should make ourselves bankrupt... Think that shocked me more than anything, but it still took me some time to start facing up to it.

Well done for posting on here - the people give great advice and things DO get better.

One thing which helped for us was being able to use the equity in our house to get rid of a consolidation loan (which we took out to get rid of credit cards, then used the cards again ). The loan company made 14k out of us in less than 2 years ... We had a low credit rating and it was hard to get a new mortgage, but we *did* get one, and it put us on the road to recovery.

I'm sure the MSE's on this site can offer some great suggestions - this site helped me turn the corner. Good luck with sorting it out - and getting him to face up to it! We used tyo have arguments and sleepless nights about lack of money, now we're closer than ever (we've been together since 94 as well! 11 years ...).

All the very best to you.

Apple_2

Hi Kate

Just wanted to give you some support. My O/H had debts too, me I'm the opposite, I don't spend what I haven't got. We didn't have the arguments you've had because he was already in deep doo doo when we got together. He spent 3 years 'fire-fighting' the phone calls and letters ( keeping how bad it was from me ) but the point is he'd stopped the overspending so I wasn't in your position. I couldn't stay in a relationship with someone who was knowingly racking up debt. Your problem is your O/H hasn't had his 'lightbulb' moment yet and still thinks everything is manageable. You obviously don't. Equally I wouldn't want to consolidate 'his' debts into 'our' mortgage, especially when your O/H hasn't changed his spending habits.

Don't know what else to say. My O/H nearly had to file for bankrupcy early 2005 but is nearly back on his feet now. One BIG word of caution - even though we didn't have a joint mortgage ( my flat ) and I am referring here to bankrupcy only, I didn't realise I could have been caught up in his financial mess. You both have a joint mortgage, if he ever goes bankrupt, or creditors go for a charging order, your home will be a part of the 'pot' they go after.

Good Luck

in*the*red_6

Hi Kate
I think you need to stand your ground particularly where the mortgage is concerned. Yes, your rate is high and you may be wise to look for a remortgage for the existing amount but by consolidating the debt into the mortgage you have more to lose if your partner is made redundant and you find you are struggling to meet the mortgage payments i.e. your house! At least if the debt remains unsecured there are other ways of dealing with it if it becomes necessary such as CCCS or Payplan.
I think you have already realised that this wouldn't be a good move, and neither would buying a new car be in your present situation.
I'm afraid you just have to be tough and not give in to him, I have been in a similar situation, always feeling like I'm being the ogre about what we can and can't spend and in the past giving in because of my husband's sulks! I've explained to him now how deadly serious I am about getting rid of our debt as we really can't have the sort of life we want with it hanging round our necks. We're still having the arguments when he decides he 'needs' something that I know he doesn't but I'm refusing to give in to it now. Forgive me if I'm wrong but it doesn't sound as if you have children, this may or may not be in your future plans but you really need to be firm and get him to address this now as you won't be able to plan any sort of settled future, or have a family, if he carries on as he is.
Best wishes,
ITR

CharlieBarley_2

Hi Kate,

We're in the same boat. My husband racked up huge debts due to gambling (which, fortunately, he has stopped) and we had to move in with his parents to pay them off. I had to take charge of all the finances and write a strict budget of incomings and outgoings. It's a really good idea to sit down and do this together as it encouraged my husband to be completely honest about all the credit cards he had hidden away. My husband was burying his head in the sand and wouldn't admit how bad it was, until we sat down and did the figures. Anyway, we've still got lots to pay off, but this year we're just about able to move out of the in-laws and into our own place (albeit rented). Once you've got a repayment plan in place, things will start to look better. Our relationship is much stronger now we're honest with each other! Good luck.