Partner in a mess...

Giraffeseeker

Hi,

My boyfriend has unsecured debts of £35K. He is in a situation where he is running out of money around the 10th of each month and then living on credit cards, but has around £150 left of available credit on the final card. He has this week been refused on a new card.

We do not live together and he has decided he will release some equity in his house. He is 46, has a mortgage of £130K on a house worth £190K, and he wants to borrow £40K to repay debts and do a few jobs around the house. He is with Santander for banking and for his mortgage.

I think he will be better off going down the DMP route as I really think (know) that he will just start on the credit cards again. I am sick of bailing him out all the time. I am on a DMP myself and managing fine without the cards now I have learnt to budget and live within my means.

I am actually hoping he will be refused on the remortgage - what do you think are the chances he will get it? He earns 42K per annum but his current debt repayments are £850pcm PLUS he pays £320pcm in child maintenance (which he *thinks* he can get away without disclosing to Santander).

He has his heart set on the remortgage and I have tried to gently say he needs a contingency plan in case it is refused but he doesn't listen. I am terrified if refused he'll go to an "off the high street" lender and get in more of a mess.

Any advice on how to support him in making the right decision here?

Tixy

I'd think pretty unlikely to get a remortgage taking him to 90% LTV with his existing level of debts. Especially as santander will see how his current account is being run.

Re the maintenance - they'll presumably be able to see this coming out his account each month (if he pays it personally) or see that his net paying going in doesn't tally to his stated income unless there is a large deduction - so I would certainly suggest that he does declare it to them openly.

It doesn't sound like it would be a solution to him, a DMP or simply a major change in budget / spending would seem like a better solution from the information given. I'd have imagined on his salary he might have been able to manage repayments of £850 plus mortgage, bills & maintenance without having to go for a DMP. Do you know how much his current mortgage payments are?
£42k is around £2600 a month, less £320, less £850 less mortgage X - how much does that leave him for his other bills / living costs?

Do you know how much his card debt has increased by over the last say 6months? i.e how much he is overspending by each month?

As to how you persuade him - thats a tough one, but when debts are increasing month on month then consolidation loans alone never tackle the issue that a person is overspending.

Do stop bailing him out though - he earns a decent wage and you are on a DMP. He can afford the essentials - and why should you support his luxury spending?

FireWyrm

tintingirl wrote: »

Hi,

My boyfriend has unsecured debts of £35K.

Holy moly. That should be a red flag to you for a start. I blanched when I figured out I owe £10K. I'm determined to get rid of that much and couldnt imagine 35K.

tintingirl wrote: »

He is in a situation where he is running out of money around the 10th of each month and then living on credit cards, but has around £150 left of available credit on the final card. He has this week been refused on a new card.

Yup, they're wise to him. If he hasnt seen the light by now and started to take things seriously, I doubt he will ever change. Take from that statement what you will.

tintingirl wrote: »

We do not live together and he has decided he will release some equity in his house.

Turning unsecured into secured debt is NEVER a good idea.

tintingirl wrote: »

He is 46,

So, if he's very lucky, he'll have between 4 and 10 years of working life left before he gets 'made redundant' as has happened to so many in his age bracket. It's obviously not certain, but I dont doubt many of those aged 51 now saw it comming either.

tintingirl wrote: »

has a mortgage of £130K on a house worth £190K, and he wants to borrow £40K to repay debts and do a few jobs around the house. He is with Santander for banking and for his mortgage.

They'll laugh. It would leave him with a mortgage of £175K on a notional value of £190. It's just not going to happen.

tintingirl wrote: »

I think he will be better off going down the DMP route as I really think (know) that he will just start on the credit cards again. I am sick of bailing him out all the time.

That's you're warning signal right there....

tintingirl wrote: »

I am on a DMP myself and managing fine without the cards now I have learnt to budget and live within my means.

Good.

tintingirl wrote: »

I am actually hoping he will be refused on the remortgage - what do you think are the chances he will get it? He earns 42K per annum but his current debt repayments are £850pcm PLUS he pays £320pcm in child maintenance (which he *thinks* he can get away without disclosing to Santander).

Slim to none. I couldnt get a mortgage for more than 4 times my salary 1 year ago and I earn more than him. If he thinks he can get away with not disclosing child maintenance, he's an idiot. Worse, he's a dishonest idiot. Even IF the mortgage approval department doesnt spot the payments on his accounts, by witholding that evidence, he's committing mortgage fraud. Theoretically, Santander could foreclose on him and he wouldnt have a hope in heck of saving that house.
More to the point, his repayments on a standard mortgage would be somewhere around the £800 a month mark. With rising costs, food, fuel etc, he could just about afford the mortgage true, but he would be in a precarious situation.

tintingirl wrote: »

He has his heart set on the remortgage and I have tried to gently say he needs a contingency plan in case it is refused but he doesn't listen.

Banks dont give a brass farthing about his 'heart'.

tintingirl wrote: »

I am terrified if refused he'll go to an "off the high street" lender and get in more of a mess.

Sorry to be brutal...but you should start disentangling yourself from this person right now. There is no future here.

tintingirl wrote: »

Any advice on how to support him in making the right decision

There is nothing you can do to stop him, save him or steer him in the right direction. If he's intent on going down in a ball of flames, stand aside.

Giraffeseeker

Thank you both for your replies. If I can get him in the right frame of mind I want to show him what others' think of his situation in an objective capactity so it is much appreciated.

He takes home £2400pcm (a teacher, so pension contributions included). His mortgage is currently £620 (variable rate so could increase).

£2400 - £620 - £850 - £320 = £610pcm left for all bills, etc. Council tax alone is £100ish, so around £500 for bills, food, petrol to work (£50 per week minimum). Bills are high-ish being in a large 4 bed oldish semi. I just don't think it is do-able.

I have access to his Noddle account (with his permission) and I can see he took a £8.5K loan in March 2011 and another £9K loan in March 2012. He paid off all of one of his 4 credit cards and a little of another credit card with the 2nd loan. I the past 2 months that 2nd credit card has gone from a £4K balance to a £6.5K balance.

I told him he HAD to disclose his maintenance but he wouldn't listen, it's done direct to his ex and not via CSA so he said he could get away with it. Clearly he can't. I didn't think about the fraud aspect and them foreclosing on his current mortgage though. I will warn him of this.

Personally, when I went on a DMP I could no longer get credit (and didn't want it) so the impact on my credit file was irrelevant. What the DMP did for me though was reduce dramatically (in some cases to 0%) the interest rates I was paying.

I hope he sees sense and listens. I feel it may not be until his mortgage application is rejected that he takes advice from me. We plan to live together once our children are left home and the end of my DMP coincides nicely with this. I cannot possibly risk putting my lot in with his after all my hard work if he is in a financial mess.

Tixy

Could you try to get him to do a frugal statement of affairs to see if he could manage his current debts, it does sound tight but could be manageable. Especially if he might consider getting a lodger in or something? or increasing his income by private tutoring?

Might also be useful to try to get a statement of affairs as he is living currently, showing how much further he is falling in to debt each month. Sounds like its been £1250 a month recently. Based on the other financial info, it simply sounds like he is massively overspending on luxuries.

19lottie82

tintingirl wrote: »

Bills are high-ish being in a large 4 bed oldish semi. I just don't think it is do-able.
.

Can he not rent a couple of the rooms out to lodgers? This would free up alarge chunk for debt repayments.

And a SOA is a good idea too....

Giraffeseeker

I will see if I can get him to do an SOA. I did get him to attempt one a while back but can't find it saved anywhere on my computer.

He has 3 children aged 9, 14 and 16 and so the bedrooms are in use by them 3 or 4 nights per week (shared custody). None really big enough to share and I don't think he would want to bring a stranger into the family home as a lodger.

Delree

People change, this board is testament to that and there are some fantastic stories, quite inspiring. The thing all these people have in common is that they have admitted their problem and absolutely committed to fixing it. Until your partner has this moment and joins their ranks your efforts will be useless. Ultimatums don't work, the person has to want it themselves.

I think you can draw a conclusion from what I've written.

bouncydog1

Harsh but....I would think about yourself and whether in the future you want to have a life where you are living with debt - particularly as you have sorted yourself out. If your partner is closing his eyes to his position - which he is as he is clearly living beyond his means - then there is little hope for your future.

He is 46 and wants to increase his mortgage - at 46 a lot of people would be watching it go down and planning for the day when they have more funds available to have a comfortable lifestyle, not looking for more debt.

I would stop being "gentle" and be quite frank and tell him to get a grip and face up to reality as things are not going to improve by trying to borrow more money.

If he refuses to listen you have to decide whether you can live with his decision.

catwoman73

He has 3 children aged 9, 14 and 16 and so the bedrooms are in use by them 3 or 4 nights per week (shared custody).

If its truely 50/50 custordy with his ex, should he actually be paying any maintenace, especially as he is paying for a family home for his children to live in half the week? Who is getting the child benefit?

Agree that a remortgage would be a disaster, but thankfully the chances of acceptance should be low.

£42k is a good salary and he should be reasonably comfortable. What does he spend his money on?

BlushingRose

tintingirl wrote: »

He takes home £2400pcm (a teacher, so pension contributions included)

I know this isn't a helpful comment but I wish Mr BR (also a teacher) took this much home a month, would help us out no end.

I agree with the others though. Unless your OH can see it as a problem, he's not going to take your advice. He needs to realise it himself. As someone on a DMP (like us!) you'll know the importance of the LBM x