Just discovered husbands credit card debt. Not sure how to tackle it.

spotchequer

My husband and I have always kept just one joint account which we pay bills from, otherwise we have our own finances and keep them separate. I earn about 15k a year as due to health issues I can only work part time. He earns about £30k.  I have under £1K on a credit card which I have been paying off with no issues. My plan was to pay it off in the next 18 months. To my knowledge when we'd married that was the only debt we had as a couple, it was  some bits from our wedding.

Then a couple of years ago not long after the wedding, hubby revealed that he actually had a few thousand in debts on credit cards and that while we'd been together he'd had a small loan which he'd paid off. I couldn't understand it, we had nothing to show for it, we were essentially living in a hole to save for a house, no frills, no holidays, no nights out etc..., he had no paperwork and could produce none, everything was apparently paperless and when I asked to see stuff on screen in that case he said there'd been a problem where he'd tried to set up internet banking but he'd not realised it was linked to an old email or phone number he didn't have any more and he'd been told he'd been referred for extra security checks which could take some time.I think he only told me then because we were preparing to get a mortgage. He had about £7K of credit card debt at that time and it meant we got less mortgage than we could have had, he was very sorry etc....very scared of losing me etc... and we had serious discussions about what steps he was going to take to pay it off and get back in control of his finances,  but he was also very keen to try and fix it himself - time passed and I gave him this chance - he assured me he was paying it off etc... and didn't like to talk about it (he'd never liked to talk about money as his family just don't talk about things like that) and if I pushed it he'd start to get upset (not angry, just upset).

He had agreed he would produce paperwork to show me numbers and what it had gone on. Anyway, time passed and I would try to keep a check on him asking him how it was going, no paperwork ever appeared, numbers were always vague and I couldn't ever pin him down on any of it. He works like crazy and it often at work for periods including overnights so he can get sleep in fees.

Recently I realised that he must not have a clue when I asked him one day what the total was currently and he said 7k. I questioned him about this being the same number he'd given me some time ago and if he was doing what he'd said he would the number should be a lot smaller by now. I gave him a target of coming up with numbers and he finally did....there are now 5 credit cards with a total of just under £21k - obviously I'm seriously upset/annoyed/feel betrayed and lied to. He says at some point the payments he had set up to cover the minimum payments were no longer enough and the interest piled up, so although he'd been making payments they'd long been falling short and as he was paperless he apparently had no idea.

He doesn't do online banking and just has a debit card he uses to pay for everything. I am now unsure how to proceed to best get this matter sorted - he's looking into a consolidation loan but that would be secured on the house - I'm not cool with that for the obvious reason that this is my home too and it's not my debt. However, he's done all the eligibility checkers for other loans, for other credit cards with lower interest and they all come up as zero eligibility. The cards he does have range in interest between 29.05% and 25% - only one of the cards would lower their rate from about 27 to 25%, the rest said they couldn't help.

He has now handed over complete control of his finances to me and am just waiting for paper copies of things to come through which  he's asked for (although apparently corona may cause this to be slower than usual). I think from adding everything up in a monthly budget I've done that we could cover the minimum payments plus some more - so I'm happy to try and do that rather than leap into any secured loans - we've also got our fixed rate mortgage deal coming up to it's 2 yr end in march, I'm concerned about the impacts of that and that the mortgage bill will also go up adding to the financial pressure  - but perhaps by then after a few months of making better payments someone might be willing to offer him better deals on interest rates? Honestly I feel out of my depth, I've no knowledge of debts like this and would appreciate advice, pros and cons etc. We've got no savings to speak of and were living month to month because he was apparently paying his debts, I hope I can turn this around.

TimSynths

My eyes! Pop some paragraph/spaces in so it can be read easily.

[Deleted User]

Your starting point is to identify the debts, the rates and status of the accounts. Check his credit files. If he wasn't making minimum payments, he's going to have late payments and/or defaults, so forget about consolidating. It's not even going to be an option if he hasn't defaulted, due to the level of debt.

Once you have all the information, you can tackle the debt in priority order, depending on rates, defaults etc.  If there's insufficient funds to make payments, you can look at other options.

RelievedSheff

Sadly you will find that remortgaging is going to be very difficult if your husband has not been paying the minimum payments on these accounts. The credit card companies will be putting late payment markers on his credit file which will be a red flag to mortgage lenders.

You need to check his credit file and see just what damage has been done.

You also need to make sure that the payments being made to the credit card companies are at the very least making the minimum payments required and ideally more. I am going to hazard a guess that most if not all of these accounts are also falling foul of the persistent debt rules?

tacpot12

I think I would try to get him some debt advice from StepChange, just to make sure that trying to pay off the cards is the best option for him. (I expect it will be). 

Definitely don't use a consolidation loan. It is better that his credit rating is and remains shot to pieces for the moment. I wouldn't worry too much about the mortgage. Interest rates are very low at the moment, even if you are not any any sort of deal, your mortgage payments should remain affordable.

I would advise you to use 50% of your spare money to clear your credit card and 50% to clear his. Please don't delay clearing your debt, just because his debts are bigger.  Given all his cards have very similar interest rates, I don't think you need to worry too much about prioritising the credit card with the highest interest rate. Just divide the 50% between all the cards and pay this off. 

It will take a while to clear these debts, but it is possible. If you want to post a Statement of Affairs (SOA) here, we can check whether you have missed anything or are paying too much for certain items. You really want to maximise the free cash you have in your budget to pay of these debts. Getting your SOA reviewed here can help with this.  

Help him get online access to his credit card accounts.

Ultimately you taking over his finances isn't going to help him learn to manage his financial life himself. As his total debts come down to low levels (c £2000?), I would ask one of the credit card companies (perhaps the one that has shown themselves to be the most helpful!) to drop his credit limit to £300, and let him start using that card again, on the proviso that you know his password to his online account. If he changes this password and won't tell you what it is, the alarm bells should start ringing, and you should consider whether you want to be financially connected to someone who cannot and will not manage money or be open and honest with you. You could get divorced and continue to live happily together, safe in the knowledge that you will not ultimately have to take on any of his debts. 

greensalad

Having been in your husband's situation, I think this is really a question of the mental changes needed not just a quick fix like a consolidation loan.

You need to get to the bottom of why this debt built up, and what it was spent on. Ensure that there are no further issues like secret gambling addiction that fuelled the debt. It is perfectly possible to rack up debt on nothing in particular though, though I expect you would notice (new clothes, car, furniture etc). Perhaps because you earn less than him it is hard for you to see how the money got spent as maybe you presume things he bought were just things he could afford on a higher salary? I can definitely see that happening as our perceptions of what higher salaries are don't often reflect reality.

After you've ascertained what the debt was spent on you need to establish good habits around how and why you spend money. Do you save for things, even luxuries? It's easy to say "we don't spend on clothes/takeaways/travel etc" but then there is no lifestyle change so you end up putting it on debt. It's easier IMO to budget for those luxuries instead of trying to strip them away completely as that makes the temptation to fall back into bad spending patterns all too easy. 

You should post an SOA here to work out how much per month you have to service the debt. Cut up all the credit cards (or keep them somewhere safe but don't use them). Access his credit report to see which credit accounts he has to make sure everything is considered. 

If you know how much you have to service the debt via the SOA then you can input into the debt snowball calculator and see how long it will take you to pay off/which debts you should service first.

Brenster

Hope i am wrong, but all this points towards someone hiding a gambling problem

DayDreamerandGeneralWaster

Yes, what has he been spending it on if you have nothing to show for it? You need to know in case  he does it again. 

enthusiasticsaver

OK you are obviously shocked and rightly so.  It sounds like he has little to no control over spending and maybe if he does not do online banking and is paperless he has not easily been able to keep on top of it.  £21k is a lot but by no means the worst but how quickly you can repay it depends on how much spare money you have.  Doing a budget is the first step so good you have done that.  Getting online access to keep a better watch on the accounts is something else you should do.  Also build an emergency savings amount into your budget so you have savings to fall back on rather than use credit if you have an unavoidable bill.  Last suggestion I would make is set up an annual savings account for things like insurances (cheaper if done annually rather than monthly), car service/mot if you have a car, boiler service and christmas, birthdays and holidays.  It just makes budgeting easier.  You can do other savings pots for things like clothes/shoes if you have children and car/house/white good repairs.

Tackle the most expensive cards first and pay minimums or slightly rounded up on the rest.  You could post an soa (statement of account) on here for ideas of where you can cut your budget further.  It may be that he is not very organised with money and really did not know the debt was piling up or he is a bit of an ostrich or maybe if you have had to reduce your hours due to health issues he did not want to worry you.  I am not saying any of  that is ok but one of those may be the reason why it got so high. I hope you sort it out soon between you.  I would be examining his account carefully to see how the overspending occurred at the same time as without changing spending habits I don't see how it can be sorted.  Interest piling up is one reason why it increases but if it was £7k a few years ago and has tripled that cannot just be down to interest.  He is also seriously overspending. 

Fatsdom

As someone else said above, everything about this says to me the possibility of a massive gambling issue. It's quite hard to get into that much debt with literally nothing (even if its junk/holidays etc) to show for it, with the exception of gambling.

Is gambling something he has mentioned before, even recreationally?

Of course I might be wrong, but it seems to be a possibility at least. 

fatbelly

spotchequer said:

He doesn't do online banking and just has a debit card he uses to pay for everything. I am now unsure how to proceed to best get this matter sorted - he's looking into a consolidation loan but that would be secured on the house - I'm not cool with that for the obvious reason that this is my home too and it's not my debt. However, he's done all the eligibility checkers for other loans, for other credit cards with lower interest and they all come up as zero eligibility. The cards he does have range in interest between 29.05% and 25% - only one of the cards would lower their rate from about 27 to 25%, the rest said they couldn't help.

Definitely no to the secure it on your house idea

On his income, with his share of the household expenses, can he afford the contractual payments?

If no, he needs to be looking at a debt management plan. Yes, that will mean defaults (he may have them already) but it's a safer option.