Not sure what to do...

in Debt-free wannabe
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dilaliodilalio Forumite
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Hi there,
Member of a few forums and big fan of them. First time posting here though. 

I'll try and be brief. 
I was off work from Jan 20 and was in hospital when lockdown commenced. Nervous breakdown related. 
My partner soon left her job as felt unsafe there due to pandemic. 
Started to use credit cards to pay bills.
I came out of hospital and began recovery.
Partner then went downhill and she developed severe OCD. 
She put a lot on credit cards and now has around 25k on them, I have a few cards with about 3k on them which I was managing OK with.
She finally managed to get a working from home job as her OCD meant she could not go into a place of work. Things are improving all the time thankfully. 
In dealing with the debt, she wanted me to apply for a loan, in my name.
I have to admit I was reluctant. 
I suggested getting help from her credit card companies or other debt advice org but, as her new job is with a bank, she does not want to jeopardise that new employment with any kind of IVA or such.
So, after some heated discussion, I started looking at loans for 20k.
My bank app offered me a pre-approved loan but with extortionate interest rate. 
I then applied for cahoot but got a higher APR than the representative rate, which doubled the interest amount repayable over 5 years. 

Before I accept this offer, which I'd rather not. 

Can anyone help advise me further with what we may be able to do? 

Many thanks. 

Replies

  • edited 30 May 2022 at 8:09AM
    middlingditchmiddlingditch Forumite
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    edited 30 May 2022 at 8:09AM
    It's your life, but I'd strongly advise against proceeding with the loan. 

    It's not fair or reasonable of your partner to pressure you like this. Yes, people in relationships should support each other through rough times but it doesn't mean one half of the couple has to do something they're seriously uncomfortable with just because the other one wants them to. I don't like the fact that there has been "heated discussion" in which presumably she has been pressuring you to do this for her.

    I'm not saying this is "financial abuse" necessarily but it can start to go down that road, so I just want to raise a red flag on your behalf.

    PS You need to calmly gather more information between you about whether an IVA (for her) would actually jeopardise her job or whether she's just assuming it will. 
  • EssexHebrideanEssexHebridean Forumite
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    PLEASE do not take on a loan to clear debts for someone else. We have, over the years, seen literally hundreds of people on these boards who have done this and it's tended to end badly in a whole variety of ways - the most common being that the person who ran up the debt in the first place doesn't in any sort of real terms end up taking responsibility for the situation, and so proceeds to run up further debts. Other possibilities (again, all scenarios we have seen on here) include the party who has taken the loan ending up feeling resentment about doing so, and that leading to the breakdown of the relationship. The relationship breaking down for other reasons and the party who has taken the loan suddenly discovering that the person who said "of course I'll pay it back" suddenly decides they can simply walk away. 

    I agree with the above - the "heated discussion" here is a massive red flag - and if there were NO other reasons to NOT go ahead with the loan, that would be the deciding factor, for me.

    The first step - assuming that in real terms your finances are connected (joint account, for example?) and that you view your income as "household" rather than individual is to put together a SOA (Statement of Affairs) so we can see how much wiggle room there is in your household finances to pay back the debt. Second is to look into whether a DMP (Debt management Plan) might be suitable for your partner - it may well, as it's an informal arrangement so mostly won't have any bearing on employment, although that can vary depending on the role. 

    Above all, don't panic, and don't take on the responsibility for someone else's debts - you absolutely do NOT need to do that. 
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  • theoreticatheoretica Forumite
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    One thing which is perhaps lacking is definite details of her employers attitudes to different types of debt issue - I would expect HR to have a policy which sets this out, and likely for different levels of employment.  But I strongly expect there will be options available to her.  Do banks still do employee loans?Or a DMP?  My understanding is that being open about being in debt (and after time out of work is not a problematic reason) is unlikely to be an issue - but trying to hide it or financial shenanigans (in which I include getting your partner to take debt on for you) may worry them more.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
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  • RASRAS Forumite
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    Hi

    An IVA would NOT be the preferred solution for consumer debt this size, not least because of the huge fees. 

    Your partner would be much better off with a debt management plan, which is an informal arrangement that does not get onto the Insolvency Register. They can be self- managed or done through a debt charity (see sourcrates' signature).

    I'm concerned about the pressure you are being put under. Your partner needs everything to be a certain way, an having a bad, untidy, whatever is the word, credit record is challenging.

    Clearing that up by getting you to take on the debt is not a good idea, for you or her.  It certainly is not "dealing with her debt", just hiding it. And the fact that you are only being offered high interest rates means that your own credit record is more troubled than you thought. 

    Do a Statement of Affairs (see EH's signature)  but also check both your credit records Check your credit score & report for free - MSE (moneysavingexpert.com)

    It may well be that your financial association with your partner has already affected your ability to take out credit.

    Your partner needs to carefully read her terms of employment and check what she put on her application form if it asked about debt. Some employer's are OK about debt but have little truck with those that hid debt. They may have safe channels (either through the union or HR) which allow employees to ask "what if" questions about issues like debt. So once you see the SOA, you can work out if the debt can be managed without any defaults, or not.

    Whatever, you need to find ways of communicating that allow you both to have your situations respected. If you stay together you will be living in straitened circumstances and there won't be much left over for fun things or outlets that take the pressure off the relationship.

    First things first, tell your partner that your own credit rating is poor, and you need to look at the reason why. And suggest she looks at her credit records at the same time.

    The person who has not made a mistake, has made nothing
  • sourcratessourcrates Forumite
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    It`s a very familiar story, trying to borrow your way out of debt, its always the first option people look at, seems great doesn't it, pay off all your debts, lower monthly repayments, it will take longer, and interest rates are a tad high, but that`s ok, we will manage......

    Thing is managing isn`t living, and what most fail to do is change there bad financial habits that led to the debt in the first place, they tend to start using the consolidated lines of credit again, justifying it to themselves by saying "its just this once", but it never is just once, and before they know it they are up to their necks again with another mountain of debt to service, as well as a 20k loan.

    And even then some don`t learn, they rinse and repeat the same thing again, only their "lightbulb moment" saved them from bankruptcy.

    There are 4 debt solutions available in England and Wales, Bankruptcy is top of the list, IVA a close second, followed by DRO and finally DMP (an informal solution to a debt problem).

    If the partners job may be at risk, then as advised above, try and get a copy of the actual work contract and see what it says, as debt management is the most likely way this is going to go.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • edited 30 May 2022 at 3:51PM
    itchyfeet123itchyfeet123 Forumite
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    edited 30 May 2022 at 3:51PM
    Agree with the above that taking a new loan isn't a great idea. 

    But just wanted to flag that the request for OP to pay towards the debt isn't necessarily financial abuse. Sounds like both parties were out of work for a bit, and there was mention of using cards to pay bills. The "right" approach should consider not just whose name the debt is in, but who benefited from the spending at the time. 
  • BrieBrie Forumite
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    Is she stopping using the cards?  That would be a crucial thing.  Otherwise it may be a case of you getting a loan and clearing her balances and she does it all over again.  And then you both owe lots.  And what if she decides she's had enough of you?  So she exits and you still have a loan to pay for her debts.

    Stopping the reason for debts is a very important step in resolving things.
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  • dilaliodilalio Forumite
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    Firstly, thank you for your replies.
    I very much appreciate some input into this as, it has been a source of tension for a number of weeks.

    As said, in my OP, I tried to be brief.

    Based on the responses, I feel I need to give a little more background... 

    Although we are not married, we have been together for 33 years and have 3 kids, 15 to 22.

    I have suffered numerous nervous breakdowns since my 20s, every 3-5 years. Fine in between but debilitating when they occur.

    I've changed careers but always been self-employed and earned fairly good income.

    Partner has always kept things together during these spells and worked hard to keep the house and kids on an even keel. 

    Spring 2020 was the 1st time I ended up in a psych unit.
    I went there voluntarily as I couldn't get myself back together and couldn't stand the strain it was putting on my family.

    It was a terrifying prospect for me but I was able to be determined enough to give them the break I felt they needed.

    My partner continued to work, deal with the house and kids and now visit me, on a daily basis, bringing me things I'd asked for and needed.

    Only her wages were coming in. 

    Then Covid and lockdown happened. 

    I came out of hospital into the 1st lockdown and, as it happened, this was the perfect rehabilitation for me due to the fact that the whole of society was reinventing itself! No guilt about the world carrying on whilst I dwindled on the sidelines.

    In this environment, with my family all at home around me, I recovered quickly and was strong enough to return to work, and was allowed to do so, as a key worker, under the then rules.

    My partner, however, was not comfortable with the measures (or lack thereof) implemented by her workplace, against covid.
    After some time on furlough she decided to resign.
    She then became ill with what she convinced herself was covid.

    She isolated herself away from the rest of us and her mental health deteriorated rapidly. All things considered, this was not surprising but was a very difficult time for us all.
    She developed severe OCD and it was very concerning for all.
    It became much more protracted than my recent spell of ill health and even though she has improved greatly, there are still things that cause her anxiety.

    So, from Jan 1 2022, until @June 1 2022, I didn't bring any money in.
    I did get good help from the SEISS.
    There were a lot of contributing factors to this debt, including, in part, my partners illness.

    There are other factors, in which I have put a strain on our relationship, yet my partner has stuck by me. 

    I know this is very personal information but felt it needed to be put forward, so that those of you replying have a better idea of the situation. 

    My intent is also to show this thread to my partner, so feel I need to be fully transparent. 

    My thoughts are that this could be dealt with using some form of debt management, rather than me taking out a loan but, I do understand my partners concerns about her job (which she has spent months trying to get, as she is still not ready to go into a place of work). And I do appreciate my share of this debt.

    Thanks again for your input.
  • middlingditchmiddlingditch Forumite
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    I'm sorry for all you've been through. Hope you can start feeling on more of an even keel soon.
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