Help needed from anxious poster

Money_Rollercoaster

I would also sit down and think if there are things you've bought that you can return or sell for a good proportion of what you've paid for them and if there are commitments you've made for holidays or other products that you can get out of.


With the level of income you have, even though it is a good salary, it isn't going to be plain sailing and you will need professional advice to find the best way through it. There is absolutely no chance that you can do this alone and I would suggest that as soon as you have any sort of rescue plan, that you bring your wife up to speed. I don't think anyone here can guarantee her reaction will be positive, but it is in both of your interests that she is fully aware of your current situation. It is strongly likely that you will take some considerable time and manoeuvring to get back to square one, but you've made the first and most important step by facing up to the problem. I'm confident that you'll receive incredible support here on these forums.

ada-or-ardor

I'm not aware of the repercussions of a DMP or whether your mortgage provider would need to do a credit check to get you onto a better deal rather than SVR. I am sure Stepchange will be a good source of information there.

Sorry to press the point home, but if this debt wasn't built up over a period of time and has literally been accrued in 8 months, aside from the gargantuan holiday, do you know what you have spent it on? What was the original loan taken out for? Not questions you have to answer publicly of course, but do you know what the actual root cause of this level of spending is? This is really essential because if you've built this up over 8 months that is some intense frittering....!

It sounds like you're ready to make changes and I'm sure once you have got your head around any repurcussions of the DMP you will be well on your way to a good plan.

Ada

January2015

If you choose to go down the DMP route then if and when mortgage payments go up, DMP payments go down (and vice versa). The principle of the DMP is that non-priority debts get a share of what is left after priority debts and living costs.

DCFC79

Have you looked at your spending to cut back on anything ?

enthusiasticsaver

As I understand it then you got a promotion and payrise at work last August and having never had a credit card or overdraft before you went mad and spent £63k over a 8 month period? Is that right? Presumably before the payrise you were living within your means and had no debt? I would also question how you spent that much and do you have anything you can sell? An £18k holiday is obviously one thing but that still leaves a gap of £45k which I would imagine is difficult to spend over that small period of time without acquiring assets which could possibly be sold?

A DMP will affect your credit score and yes this may impact on your ability to get a good remortgage deal. Whether or not your lender does a credit score you will probably have to disclose the debt and as you and your wife are financially linked through the mortgage I question the wisdom of keeping her in the dark about this. When you are unable to remortgage on to a new fixed rate is she not going to query this?

-taff

If you just stay on with the same lender, tey won't do an affordability check.
If you want to remortgage, then you will be credit checked, there are a few lenders who will lend to those with bad credit, but you'll have to look for a good broker for that.
More info, post on the mortgages board.

armchairexpert

Well, the good news is this: if before a year ago the two of you were living within your means on a smaller income than you are now, your wife is not used to 18k holidays and will be very easy to convince if you say "now we have a mortgage we need to be as careful as we were pre-promotion, or even more so".

The good-and-also-bad news is that if you've bought yourself a Porsche on credit cards, it's going to have to go. Ditto anything else, because like everyone else I can't imagine how one could spend that amount of money on intangibles, so there must be some assets involved? Which is good because it'll get the debt down in big chunks, but bad because it'll be noticeable.

The bad news is that you'll also need to look at what, exactly, was going on in your head to break the leash that dramatically. I genuinely don't mean it as judgemental, but that sort of very extravagant spending indicates either an addiction or some underlying feeling that you weren't good enough before/were unfairly restricted/were being looked down upon by your peers. So I would recommend looking at that closely, and that's always hard emotional work.

Good luck!

marco_79

You might want to see a doctor mate. I was suffering from depression, stress and anxiety a few years back and made a £20k purchase on a whim and got my family in to bother. Thankfully we got out of it quickly because we had an(the) asset to sell but I believe I had very little control of what I was doing on that day/week. £63k is a hell of a lot of money in 8 months. Hope it all sorts its self out for you. Take care!

enthusiasticsaver

Desperate_for_advice wrote: »

Thing is I'm terrible with money and like to spoil my wife and 2 kids with things they don't need (£18k holiday to Florida over Xmas for eg) my wife is very trusting and just believes what I say regarding how much things cost, my fault as it's how it has always been.

I would question this as you had no debt prior to moving so were not terrible with money. Even if your wife is very trusting and naive I cannot believe you could spend £63,000 and her not know you were overspending given that is more than one years salary. Was there some sort of trauma or depression to make you go completely over the top?

Since August 2016 when we moved I have got 6 unsecured loans and a credit card and now have total debt of approx £63k with monthly payments of £1350, I have had a mini breakdown over this as with the mortgage etc I have negative monthly disposable income and am borrowing more just to get by.

I have had my wake up call and need to get this sorted, I cannot speak to my wife about it as it's a complete betrayal and she would never forgive me, she just wouldn't. Did she not question the sudden mega spending? I think if my DH did that I would either think he had won the lottery and not told me or was suffering some sort of manic depression.I have been in touch with step change and they suggest I go on a DMP, my knowledge is very limited on these but they say my commitment to them for all creditors would be £370 per month which would be a great relief but I know there is bound to be catches. The catch is it has a massive adverse affect on your credit record but if you have the sort of personality who goes over the top when you get a credit card this is no bad thing but at some point you will have to tell her. It will come to light in a mortgage interview, a refusal of a phone contract, bank account etc etc

On our mortgage there is a 2yr fixed rate which finishes August 2018 then if goes on SVR my payments go up £220, I need some advice as to what to do as if I go for a new mortgage deal to keep payments near what they are now they are bound to do a credit check and I assume with being on a DMP my credit will be shot to bits? yes they will do a credit check. If your mortgage goes up though the DMP payment should be adjusted.

I do not care if I ever get another piece of credit in my life as I cannot continue or would ever want this level of stress again as it's unbearable, my wife is totally against loans/credit etc hence another reason why I cannot tell her. If she is totally against loans or credit then this is exactly why you must tell her. When she eventually finds out the betrayal along with the the unchecked spending will be enormous. You have affected your joint financial future, not just yours and she deserves to know. With all due respect you need her help to deal with this too and her having some indication of what you do when you have access to credit or any significant amount of money means she should play a more active role in managing your family finances.

Long story and I know it is me and only me who has contributed to this situation I'm just confused as to which way to go.

This has taken a lot to do this but it's only my fault.

Thanks

This is fixable but I personally would be more furious with the betrayal if you don't tell her. I think you had some sort of manic episode last year as I really don't think that amount of money can be spent in one go unless you are a gambler.

nkkingston

Did the new job come with extra stress? This definitely sounds like some mental health spending that's gone on, either trying to convince yourself you deserve the job by buying 'billy big b***s' items, or self medicating for the stress of the new job with purchases. With the volume of money involved, and even robbing Peter to pay Paul with more loans, either you got assets you can sell, or you've got a gambling problem you haven't mentioned.

I'll give you the same advice I give everyone on telling their partner - make sure it's after a meal, so no one's hangry, in a neutral space (not a bedroom). You know your partner, so think about whether the best approach is to go in analytically, with budgets and spreadsheets, or emotionally, with an honest discussion about how you got here and how it's making you feel to be here.

Odds are she can tell you're keeping something from her, and she's probably worried it's something way more significant than money. A secret is a secret is a secret, and when you keep information from a person affected by it you're tacitly telling them you know better than them. Hiding this information from your wife is failing to treat her as an equal person in your partnership, and the longer your leave it the more damaged the trust between you will be.