Wifes £25k Debt

dangermouse1_2

Hi all,
I'm looking for some advice.
My wife has racked up £25k debt on several credit cards in her name.
She cannot repay the interest on the debt and continue to pay her share into our joint account for house, food, travel etc.
She wants to pay it back and has suggested that we add it to the house mortgage and she will pay the extra between the current cost and what would be the new cost.

1) I'm not that keen on adding it to the mortgage. Then the debt becomes 'ours' and will be with us for years and is now secured against the house.
2) I could suggest that I pay in more and she pays less to allow her to service the debt better but I can't put much more in.
3) What other options are open to us? Speaking the the creditors to arrange a deal? Renage on the debt? Speak to CAB
Scratching my head and worried!

Thanks

DM

[Deleted User]

If she defaults on the debts, then you will both be shafted, as I assume you are financially associated.

Work out how to pay the debts off between you, Then put in place whatever plans you need to between the two of you for her to pay you back, if that's what's needed.

Thrifty_Pixie

seriously, i wouldn't add it to the mortgage for the reasons you say. also it wouldn't make your wife address her spending habits, which needs to be done if this is not to happen again. what's to say that she won't move her debt onto the mortgage and then just take out more credit on the side? then you have a massive joint debt on top of everything else.

i would contact StepChange for some advice, and get a DMP in place. it'll mean taking a hit with some defaults on her file, but at least she will (hopefully!) learn some lessons from it

maghater

dangermouse1 wrote: »

Hi all,
I'm looking for some advice.
My wife has racked up £25k debt on several credit cards in her name.
She cannot repay the interest on the debt and continue to pay her share into our joint account for house, food, travel etc.
She wants to pay it back and has suggested that we add it to the house mortgage and she will pay the extra between the current cost and what would be the new cost.

1) I'm not that keen on adding it to the mortgage. Then the debt becomes 'ours' and will be with us for years and is now secured against the house.
2) I could suggest that I pay in more and she pays less to allow her to service the debt better but I can't put much more in.
3) What other options are open to us? Speaking the the creditors to arrange a deal? Renage on the debt? Speak to CAB
Scratching my head and worried!

Thanks

DM

As soon as possible you must transfer the debt on the credit cards to a ideally a bank loan, or a loan organised through your mortgage provider. Credit card companies can charge 3 or 4 times the rate of interest that a standard bank charge. If bank is not prepared to do that talk it over with CAB. First call def. the bank, and quicker you do it, the quicker her payments will fall. Best of Luck

Thrifty_Pixie

Deleted_User wrote: »

If she defaults on the debts, then you will both be shafted, as I assume you are financially associated.

Work out how to pay the debts off between you, Then put in place whatever plans you need to between the two of you

personally i think this could only work if the OP's wife has changed her habits. it's MUCH harder for a husband to be hard on their partner than a DMP will be.

if they already have a mortgage and can take the hit, i'd do it for the long run.

gb12345

maghater wrote: »

As soon as possible you must transfer the debt on the credit cards to a ideally a bank loan, or a loan organised through your mortgage provider. Credit card companies can charge 3 or 4 times the rate of interest that a standard bank charge. If bank is not prepared to do that talk it over with CAB. First call def. the bank, and quicker you do it, the quicker her payments will fall. Best of Luck

I would not recommend this.

What is to stop her taking out a loan (assuming she could even get one) and then either blowing all the money on something else or paying of the CC and then gradually racking up the balance on the card again over a number of months. Not being rude, but to have racked up a £25k debt that she can't afford to repay shows that the OP's wife is not really financially savvy.

The OP is likely to be back here in 6 months saying "my wife has £50k debts that she can't afford to repay".

@OP, it is also not a good idea to convert a debt from unsecured to secured. For £25k, a lender would have no quams about pushing for reposession if you couldn't repay a secured loan.

The best course of action would be to speak to one of the debt charities (not a debt management company that charges a fee) to discuss the best way of freezing interest and setting up a repayment plan.

maninthestreet

D-i-v-o-r-c-e.....

KeepFighting_2

if the debt is on Credit Cards then either
1) Get the Credit Card companies to agree to charge no interest or else you will take years to pay it of. She could arrange a Debt Management Plan then it is in her name not yours.
2) Put it one the mortgage the interest rate is much lower and therefore it will be paid off quicker the extra mortgage can be for a much shorter term and you could pay it off even faster if you can raise extra cash.
The main thing is to reduce the interest rate.

You are married and therefore please remember that you are in it togehter to a certain extent. You need to sit down and discuss rationally why your wife has incurred this debt and how are you BOTH going to stop it happening again.

Bravehearted_2

Don't do anything that would also make you liable.

ChrisCostCutter

25k!! Mate thats a bomb shell dropped on you. Apart from going through her, I would look at a bank loan to pay over a long period of time. You want to pay this off without being stung money wise over a good few years. Good luck.
Start selling whatever you can as well in order to try and make a head start at the debt!

Better_Off_1983

She needs to address it... not pass it to you /add it to the mortgage.

She needs to speak to the creditors and ask them to put a block on all the cards if they have not already.

Pardon my ignorance, if the mortgage in your name only?