Husbands Surprise debt..help with best plan of action

Doxford2016

I don’t understand what you mean?
The loans have an end date, and set payments. I always assumed that these took into account the amount borrowed and interest?

getmore4less

Doxford2016 wrote: »

Hi

thanks for your advice!

I don't fully understand the first part of your post and where the figures come from? I'm obviouslt quite new to this! haha. The debt has increased over 3 years through high interest cards/loans and him trying to hide the fact he has no money left after paying the bills. So effectively he says the credit cards have been used as if it was his spare pay after bills. Eg - I say i need £200 towards holiday one month because i've calculated after bills that he should easily have that spare, he doesnt want to tell me that although hes just been paid he has nothing left because of paying debt off and instead takes out a new loan to send me the money if that makes sense?

The £3k net income includes my £1200 of which I pay my bills for car, phone etc and have been left with £500 spare a month which ive just spent on living. None of my money has gone towards his debts.

Definitely agree with you about the £7500 credit card and that is definitely the one I want him to get rid of first in any which way. He is selling some of his things and is going to plough everything into paying that one off asap.

I am using some of my disposable income to pay off a chunk of the smaller credit card monthly.

The overdraft is £1k but he's only charged when he uses it so not the whole month

This is why the SOA is important you need to know where the money is going

It is not all(£2200) going on Interest it is being spent somewhere.
The land card payments may have used up the cash but it was resent and more.

The calculations are the monthly interest on each debt

£30pm charges on 1j overdraft is the equivalent of at least 45% because that balance will be lower some of the month the real equivalent will be a lot higher.

It is the most expensive debt you have. And should be tacked first. Along with the other two 40%+ debts.

Get that SOA done
Read up on snowballing debt paying off the hiest interest rate first(
Not the smallest debt version)

On the SOA put current ballance for the loans.
Also note the original loan date, amount, rate, pyment, term remaining payment and current settlement figure.

lopsyfa

Doxford2016 wrote: »

I don’t understand what you mean?
The loans have an end date, and set payments. I always assumed that these took into account the amount borrowed and interest?

Front loading of interest on loan is illegal in the U.K. Even though the loan may show the total amount to be paid if don’t settle early on your credit report, in actual fact the loan interest is charged daily on the current balance.

Therefore, paying the loan with the highest rate will probably save you more interest. I say probably because the lender is allowed to charge up to 58 days interest on early settlement. This is in the consumer credit act (http://www.legislation.gov.uk/uksi/2004/1483/pdfs/uksi_20041483_en.pdf).

I advise you request the settlement figures (assuming that is not the ones listed in your original post) for the loans and check the actual amount of savings before deciding which one to pay first. I will be surprised if the loan with the highest interest is not best.

warby68

Another vote for a detailed SoA and perhaps more so a forward looking budget agreed with your husband before the nitty gritty of which and how fast to pay the debts.

OP, you say you are are good with money and this is all husband's fault but the rate of overspending is significant and clearly there has been a big disconnect in what you thought the family could afford and what was actually coming in if you haven't noticed before. You also knew he was pretty bad with money. Not meaning to have a pop just to make sure you both try and start seeing this as a joint effort and not his problem/your fix.

Good luck