Deep Trouble

Poorman_2

I am looking for some serious advice, my wife has run up massive Credit card debts, I have used all my savings and am still looking at £45k to clear. now the more positive bits, we are both in full time employment with reasonable salaries, no mortgage and a property worth <>£300k. I also have a pension I can draw on with the possibility of taking a lump sum that will more than clear the debt, but greatly reduce my monthly pension.
I guess I am looking for a loan to cover the CC debt, any thoughts?

tanith

My first thought was poor you what a blow.. but all credit to you for taking the bull by the horns and sorting it out, I hope your wife appreciates you as I am not so sure I would be so calm finding out about that amount of debt... don't really have any advice apart maybe from downsizing instead of raiding your pension could be an option.... apart from the loan of course...

jonesMUFCforever

How old are both of you?

Poorman_2

I am in my mid 50's my wife is early 50's.
My first thought is to go for a loan but the max seems to be 25k, is there any way around this without going to a secured loan ?

shaymenRup

Don't suppose there are any charges amoungst those debts that you can claw back with a claim?

I suppose the solution will depend on your ages and how long you want to spend paying the debt off.

You are unlikely to get an unsecured loan for that amount without paying an excessive interest rate. However you could get a secured loan at a better rate.

You could get a mortgage on the house to release some of the equity.
Have you tried writing to each of the credit card companies, explain the situation and see how much they would accept in a lump sum to write the debt off.

Best of luck............make sure she cuts her cards up and doesn't apply for any more.

jonesMUFCforever

Poorman - you are right that you will only get a maximum of £25k unsecured.
You may want to consider going down the mortgage (secured) route but in the knowledge that if you do not keep up repayments you could lose your home and the knowledge that once your wife's debts have been repaid technically there is nothing you can do if she starts again!

I would certainly get legal advice and change the ownership of your house from Joint tennants to tennants in common with you getting a higher percentage to cover the loan you are now undertaking to pay your wife's debts.
You could do this anyway if you decide to pay from your pension pot. This will protect yourself should you get divorced at any time in the future.

peterg1965

Here is my advice to you. What about raising a mortgage your house. Take a £45K mortgage over 10 years, with an ability to overpay. Example nationwide 5 year fix at 5.63% would give a monthly payment of £492 month. You can overpay up to £500 month which would pay it off in less than 5 years. Other advice (if I may)
- Get your wife to cut up all her credit cards.
- Do not take money from your pension, you will regret it, the cash withdrawal from your pension should be considered the fallback option.
- Do not 'downsize' properties if you do not want to. This will probably cost at least £10K in itself. 22% of the unsecured credit card debt.

Good luck.

tyllwyd

Have you looked at the debt free wannabe board? There are a lot of posters there with debts as big as yours so they might be able to give you useful advice. I wouldn't make any decisions without talking to someone like the CAB or one of the free debt advice organisations (CCCS or PayPlan). It might be that 'snowballing' your debts would be better than taking a loan (see http://www.whatsthecost.com/), or an IVA or bankruptcy might be an option - maybe not for you, but it can't hurt to get advice on all the options before you do anything that can't be undone.