Asset Rich, Cash Poor - Me vs £130k debt mountain

DebtSurfer

enthusiasticsaver said:

There is a lot of information in your posts so forgive me but I have not yet had a chance to digest all the information.  You seem to be fighting on all fronts with the debt, money management, your sons disabilities and your wifes  mental health so I just wanted to reach out and say welcome to the diary section and you will get lots of support. Lots of positives too in that you earn well and you have a house with a small mortgage and a reasonable pension.  Like others I would urge you do not use the pension to pay unsecured debts. The monthly interest on the cards is worrying but it appears you are able to pay minimums so a DMP is not the way to go.  You seem to be fairly on the ball financially so I guess you are repaying the most expensive first.  Prioritise the mortgage first.  Don't get rid of the house if it works for you. 

Will your wife reach out to AA to help with the alcoholism and can you just remove her from accounts to stop her spending? 

Thank you for your kind words.

Indeed, there's quite a few things to juggle, and while this can bring some pride with the fact that I'm still afloat, it can sometimes be a bit daunting. 
And that's why I started this public and anonymous diary. When I say it aloud it sounds like a manageable thing. Writing this down makes the effort tangible -- and not just a figment of my imagination. 

You got it absolutely right that the debt "solutions" like DMPs or God forbid, bankruptcy, are completely off in my case. They would deprive us of our assets, make our life a living hell, also would completely kill my credit history and score and I'd be out of it only when I'm in my sixties. Not the way I imagined my mature years. That would be a total catastrophe. Just NO, I refuse to accept this "reality"

Interesting thing I have noticed that I didn't expect.

Practically all my correspondents in this thread urge me not to go the Route 1 "Pension Dip" and keep fighting the debts with other means. 
Somehow I thought this route would be a very easy "get out of the jail card" for me, which would allow me to instantly come from a heavily indebted state to a very light, affluent person.

This solution came however not without concerns.

1. As you noticed, getting rid of debts is like pumping water out of a broken boat. If water rises faster than you pump it off, you're sinking. If you pump faster than the water rises, you're losing water and getting better.  How fast you pump is your income, how quickly your water rises are your expenses. With this analogy, pumping faster (expending available energy) without fixing the bottom so water won't raise as easy -- makes no sense. So, I'm concerned that wife can make debts again -- chuffed with availability of lots of money she might just go splurging, requesting holidays, a newer car, new phone and a room full of new shoes, skirts, dresses and handbags. But that solution would've left a dent in my pension, so carefully managed and grown over these years. I would hate to see the debts seeping in again, and getting "oh puh-lease would you stop talking about money again, it p!sses me off". 
2. The crystallisation processes will make it impossible to contribute more than £4k a year, that's £333 a month. I currently contribute more, about £440. I'd lose my tax-free status for pension. And these £55k -- would forever be my 25% lump sum, whereas if I wait, it can later be £75k, 90k or even above 100k -- depending on pension growth performance. ISA is of course good, but it only can be topped up with after-tax money.
3. Something tells me that there could be happy changes in my life. If I get a department head position, my salary would probably be £1k per month higher -- and that would just finally overwhelm any spending capacity of my "other half" and firmly put me on the way to quick recovery, which would speed up the faster, the more debt I get rid of.

The response I receive here is overwhelmingly advising me NOT to go the pension route, and it is new thought for me.
Here -- my first result of putting my story up in the diary section for the world to have a laugh at. 

I am amazed with friendly and thoughtful responses, and will continue this diary -- hopefully someone will one day read it and not go for a DMP or bankruptcy.

Thank you.

enthusiasticsaver

I still haven't digested all your posts but you do sound a little bit all over the place which is understandable in your situation.  

As to the money  if you have over £4k income a month and a relatively small mortgage  this should be dealt with the hard way but not with a consolidation loan.  They  rarely ever help with repaying debt and usually just ends up kicking the can down the road until the debt is £100k+ rather than  £20k.  In your particular circumstances with a wife who is financially profligate it would definitely not be the answer. As you have already said you could use your pension lump sum to pay it off then she builds up the debt again and tax wise it is extremely inefficient to take it that way while you are still working on a good salary. You will end up paying 40% tax on anything crystallized after the  lump sum is taken.  Your pension is not huge so  I certainly could not recommend that. 

I assume you are not letting your wifes cards default because you are financially associated with her through the mortgage and don't want to jeopardise your chances of getting 0% deals? Otherwise it would seem trashing her credit record might be the best way of stopping her spending although that might send her down the payday loan route although if you refuse to make the payments there is little they can do.  I do not really understand why she is getting such high limits when she has no income? Can you get them reduced so she cannot spend £11k on credit within a few months? A preloaded debit card or an account with no overdraft limit.  Undoubtedly the wasteful spending is linked to her depression and too much time on her hands when your son is at school. 

On the subject of overdrafts  at 40% interest that would be my first target. Then the most expensive card so in other words the first plan you suggest.

You have not put a statement of account up and that is useful for yourself even if you do not post it here.  £600 is high for groceries for three people. Without seeing the rest of the soa it is difficult to advise where the rest of your money goes or how to reduce outgoings but from the sound of it you are aware yourself why you don't have spare each month. 

DebtSurfer

poppy811 said:

Just a suggestion.  You sound overwhelmed and I suggest you pick one thing to concentrate on and then the next.  Nobody cann deal with so much in a one er 

Thank you.

I sound not so much overwhelmed maybe, as I do sound seriously frustrated at this situation which doesn't let me live as I dreamed to live when I'm 50 something.

But then, this frustration and even anger is something positive too, as it's under control and urges me to do something to get rid of this debt mountain. Mortgage is not a big concern, it's properly planned for and has a definite stop date; if I start getting more money I might hit at the repayments to get rid of this faster.

I know also that if I manage to shift the balance towards positive, the speed of getting rid of my debts will start increasing like a rolling snowball. All I need is some 500-1000 a month extra to start with...

Getting rid of mortgage would add an equivalent of £20-25k gross salary increase. But it's not paid off until 2029 (unless I find a way earlier and will just kill it with all extra income). 

Getting a £70-80k job (or higher) is one potential way out. Department head job would bring me £80-100k which would drastically change my debts/income landscape. So working towards it. Doing things at work demonstrating my knowledge and experience... so far, so good, but I'm still an individual contributor yet.

====

While the idea of concentrating on one thing and one thing only may seem intriguing, regretfully I have no option at the moment.
I have to juggle it all
-- lose your son and the "link manager" in school asks him has he brushed his teeth in the morning.
-- lose your wife and she'll put another £1,000 on her Klarna, if not monitored. Or will buy two bottles of "bubbly" and get p!ssed, then will meet one of her "special friends" and return home drunk and useless.
-- lose your work and someone will start pondering on your performance. 
-- lose your health and you've gained weight, and it becomes more difficult to run up the stairs, and your pressure has gone up, and your bridge has fallen out.
-- lose your sleep and you're dull and listless and don't do any work -- and then you lose your work... (see above)
-- lose your necessary things awaiting, and: your fence is slanted, your dental bridge has falled out, your cat overgroomed herself and made a sore spot, scratching and meowing all the time, your car will lose its tax, MOT, service, or insurance, even your roses are now labyrinthine and a pigeon has shat on your car. These are easily fixable problems with a bit of time and money. Some are not as easy to fix. Yet they need to be fixed too.

In a normal family, every person has their part of burden, and this allows to keep on top of it all. Mommy would cook the breakfast, ferry the son to and from school (walk or drive). Daddy would earn the money, get rid of rubbish, fix everything from clock to cars, give everyone advice and deal with financial stuff to be excellent. Son would mostly manage himself, learn/walk/run/investigate etc... read and learn stuff.
When mom is drunk and/or ill and out of equation, she becomes yet another petulant child. Needs to be fed, helped down the stairs, medicated (and no, she won't put her meds for a week herself, you need to pester her 2x a day to keep her medicated, or there be dragons). So it's then you, yourself and your excellence, against it all -- can you imagine how one would react when someone says there's a stupid red nose day in school, or a parent evening. Or when you're on an important meeting and someone rings you because she wants "two apples please and a knife". 

And yet you must soldier on -- start feeling a pity for yourself and you're screwed up, you will go into depths unimaginable and the enemy will pounce all at once. 

So... even if it's not humanly possible -- "but smile... still stays on" (Freddy Mercury).

CRANKY40

I know that you can't pay the credit cards off but you could start a savings account that should the proverbial hit the fan you could have a lump sum saved towards paying them off. Maybe you could pay a  small lump sum off here and there and lower the limit a bit at a time. Just a couple of hundred lower would help....

Another thing, PTSD from childbirth is very real. My birth from hell was 18 years ago but it's never been repeated. A lot of people seem to think that you forget the trauma once you have that bundle of joy in your arms - I promise you that I haven't forgotten it.  I felt so guilty too because after fertility treatment gives you the baby that you tried and tried for you're supposed to be happy. All I have to say to that is that my son is an only child..... If you google Childbirth PTSD there may be some support out there for your wife. 

Does your wife get PIP because in her current state she totally should. That could maybe fund someone to look after her when you are trying to work. Mental health is a tricky subject and my traumatic birth experience was eclipsed by becoming a widow when my son was 4 but if you asked I could still describe what happened and how I felt that day. 

Good luck!

DebtSurfer

CRANKY40 said:

I know that you can't pay the credit cards off but you could start a savings account that should the proverbial hit the fan you could have a lump sum saved towards paying them off. Maybe you could pay a  small lump sum off here and there and lower the limit a bit at a time. Just a couple of hundred lower would help....

Another thing, PTSD from childbirth is very real. My birth from hell was 18 years ago but it's never been repeated. A lot of people seem to think that you forget the trauma once you have that bundle of joy in your arms - I promise you that I haven't forgotten it.  I felt so guilty too because after fertility treatment gives you the baby that you tried and tried for you're supposed to be happy. All I have to say to that is that my son is an only child..... If you google Childbirth PTSD there may be some support out there for your wife. 

Does your wife get PIP because in her current state she totally should. That could maybe fund someone to look after her when you are trying to work. Mental health is a tricky subject and my traumatic birth experience was eclipsed by becoming a widow when my son was 4 but if you asked I could still describe what happened and how I felt that day. 

Good luck!

Sorry to hear about your difficult childbirth experience. Probably you went the natural birth route, and hence the birth from hell. I heard a few stories about these, and they are scary, pure torture sometimes with all those "Push, push, push!!!" 

No, no one gets her any PIPs. Also you'd remember that I'm very reluctant to disclose her conditions to NHS. Enough that they know about her alco dependency and will see her every 6 months for the rest of her life.

Once she used to receive psychological CBT therapy from NHS after she lost her Granny (heart problems) and her Mom (just 53, from cancer due to being a chain smoker) at the same year. This help availability has petered out. 6 months of me taking her there did help a bit. Then it became unavailable on NHS. 

= = =

Writing my answer, I have noticed that it would make a perfect scenario of a very slow, viscose, deep psychological horror film.

- After long physical, mental and financial tribulations with clinic that cost us £25k, we were relegated to GP practice. Thinking to relax and enjoy this last part of pregnancy.
- Wife suddenly said she wants to move from our nearby hospital (just 6 min drive) to a different county hospital (30 min drive!!!), as "she feels bad staying here and they will kill her".
- Initially I refused but backing up I hit the mirror on the car from my side. Not much damage, but she would go into overdrive and kept saying "see, this is a sign! please please move me out of here, they will kill me!" and rivers of tears. Unwillingly, I agreed.
- Her first review in the new hospital showed that indeed, the first hospital were negligent. They failed to notice a few things, lulling us into false sense of security and undue relaxation.
- At this point it transpired that our son's position was completely untoward and sideways, and could not be corrected while inside. She was arranged a Caes.
- Also the diabetes of the pregnant came up and she started to swell. Then... we had a birth; everyone was completely happy... until they looked at her temperature and it was 34.5 and so was the baby. Long story short, she spent a few hours in the theatre receiving bag after bag of blood, and I spent 3 hours trying to warm up our son with the warmth of my body... which I eventually succeeded.
- The baby didn't want to take breast and we had to find special shaped teat to start him going. 
That was November.

December:
- news about the diagnosis, I remember hearing this and looking at her happy face, when I had to deliver the horrible news, trying to round the corners... This is where she "fell into the abyss". And a crow-like "paediatric consultant" went into our life. 
- With Christmas screwed up, me trying to google up every piece of this condition (learning that life expectancy is not great but there is research which looks to give them full life), she receives news that one of her three beloved friends from her old country had suddenly died aged 45.
- Worse, no one told my wife, and she couldn't be at the funerals. She learned everything from her former boss and then her brother, and it was too late to go and pay last tributes.
At this point, the depth of her depression reached incredible fathoms.
- She just lay in bed the entire day and cried, cried, cried incessantly.
- We had to start the baby milk as she lost hers. All that fell on me. My pet hate was the nappies, endless gorram nappies...
- And then on 15th January that fateful call from my boss, notifying that our company went belly up in an eyeblink due to a black swan event, and 90% of us are just let go effectively tomorrow, without any severance. Goodbye my lucrative job in London, plush benefits and any hope of becoming a department head (which I almost reached after 2 years of working on it).

Ta-da!!!

It would continue on and on... but I'll spare the readers. I'm not here to seek pity or frustrate you with the stories. It is supposed to be interesting, after all!
I'm here to inspire you and to help get me and you out of gorram debt. 

DebtSurfer

enthusiasticsaver said:

I still haven't digested all your posts but you do sound a little bit all over the place which is understandable in your situation.  

As to the money  if you have over £4k income a month and a relatively small mortgage  this should be dealt with the hard way but not with a consolidation loan.  They  rarely ever help with repaying debt and usually just ends up kicking the can down the road until the debt is £100k+ rather than  £20k.  In your particular circumstances with a wife who is financially profligate it would definitely not be the answer. As you have already said you could use your pension lump sum to pay it off then she builds up the debt again and tax wise it is extremely inefficient to take it that way while you are still working on a good salary. You will end up paying 40% tax on anything crystallized after the  lump sum is taken.  Your pension is not huge so  I certainly could not recommend that. 

I assume you are not letting your wifes cards default because you are financially associated with her through the mortgage and don't want to jeopardise your chances of getting 0% deals? Otherwise it would seem trashing her credit record might be the best way of stopping her spending although that might send her down the payday loan route although if you refuse to make the payments there is little they can do.  I do not really understand why she is getting such high limits when she has no income? Can you get them reduced so she cannot spend £11k on credit within a few months? A preloaded debit card or an account with no overdraft limit.  Undoubtedly the wasteful spending is linked to her depression and too much time on her hands when your son is at school. 

On the subject of overdrafts  at 40% interest that would be my first target. Then the most expensive card so in other words the first plan you suggest.

You have not put a statement of account up and that is useful for yourself even if you do not post it here.  £600 is high for groceries for three people. Without seeing the rest of the soa it is difficult to advise where the rest of your money goes or how to reduce outgoings but from the sound of it you are aware yourself why you don't have spare each month. 

I've become prolific... lots of pent-up feelings, I guess.

Re: consolidation loan.
Agreed!

E.g. you want to pay off 2 credit cards. You take a £25k loan, which is 4 years of £600 or so monthly payments at 7% APR. Now you don't have 2 minimum payments, which are probably £500, and which you can spend back immediately if you're short on money, but you have a £600 albatross on your neck which is now stuck with you for 4 years. 

As a result, you haven't really moved in the direction of more manoeuvrability, instead you have just deteriorated your overall situation and removed a part of your flexibility.

I already tried one. My job situation was very solid, I was moving up and the chopping block didn't threaten me. I thought I'll save on interest and did exactly this -- put half of my credit card debt into the loan and left one card at 0% deal. Perfect? Not really. What happened afterwards that wife's shenanigans started to burst into credit card as there was not enough money to pay for it out of earnings. You can guess the rest.

She does not understand any concept of limit. "Your cards are maxed up. You've spent everything".
"OK, she answers, how to I pay for this order then?"
"You don't".
"Not an answer! I really need this cream and this bottle I've looked for 3 months and ... blah blah blah".
When I refused to pay, she googled and googled and discovered Klarna for herself.

She has no income now, but for 3 years she was working. Her work was in London and earning was £24k and then the company went into hardships and it became £21k. Leaving £800 a month net when you pay for railway ticket. At that time N-Wide gave her the card and kept raising her limit. We never spent on this. The limit went up to £11k.
Last year she started spending so much no income could pay for it. About 7-9 months she went from 0 to £11k. Her statements were a horror movie. And of course any attempt to talk about this goes into hysterics, "Jane good, Tarzan bad", all that.

Then came warnings from me... 10% left... 0% left. You maxed it out.
"Will you repay it for me a bit, I got no room left to spend?"

That's my wife for you. I guess this is called "kidult", kids in their soul looking as adults but remaining really kids, never grown to any responsibility.

Serves me right for dreams how I will marry a girl with a decent profession, so we would have 2 salaries and no kids for a while, then buy a house, then become wealthy and then affluent.
It was not meant to be. Karma?

P.S. I'll probably concoct some SOA later, since this seems to be the rule of this land and one of the things that can help. Will figure out where it is, I saw the link somewhere

enthusiasticsaver

DebtSurfer said:

P.S. I'll probably concoct some SOA later, since this seems to be the rule of this land and one of the things that can help. Will figure out where it is, I saw the link somewhere

SOA Calculator (lemonfool.co.uk)

Above is the link to the soa if you want to put one up.  It can help you see where the overspending is occurring although in your case it seems like you are not the issue and stopping your wife wasting money is the problem. Does she understand the stress this is causing you and how it is her spending which is stopping you going on holiday or being able to go out for a meal or whatever?  You have no money to spend today because you are paying for past mistakes. Or is she unable to understand when in mental health crisis? 

strawb_shortcake

Hi,

I certainly can't offer any more value than the more knowledgable debt experts that have already commented. 

Someone suggested a pre paid card, which seems a good way forward, remove the lines of credit available. It sounds as though your wife needs some tough love to helping you make those fundamental changes you all need.

When a friend was dealing with an alcoholic partner, they used the sober days to put limitations on the damage they could do on non sober days i.e. removing the wheels from the car so he couldnotdrink drive. Is this something you can work on?

I completely get your reluctance to speak with authorities and ask for help, but it really does sound as though you all need support. The school clearly know it's not all rosey at home hence the questions. It's not fair for your Son to have to "bend" the truth when asked questions.
Alcoholics don't hide their dependency and illness as well as they think they do, others will be more aware than you/she think.

As well as building your financial resilience, perhaps you also need to look at your emotional resilience as a family unit, as this strengthens the rest gets easier.

CRANKY40

I had a c section actually, a planned one because I had a very rare pregnancy related condition. I also had high blood sugar levels because of the drugs that I was taking to counteract the original problem. I feel for your wife, I really do but by the sounds of things there was already a problem before childbirth if she wanted to leave the original hospital. It's ok to talk about all of your problems here, nobody judges. I'm assuming that even if the cash for travel was available she wouldn't want or be able to visit her other friends? 

I was left solo parenting a 4 year old when my husband died and I found myself somewhat oprimistically labelled a "young widow". I stopped work because I couldn't find childcare for the school holidays. I went back to work when he was 14 and could be left alone and I have paid off all the debt that I acquired while I wasn't working. At some point though most of us on this board have been in a position where the state of our finances have stopped us sleeping. Talking it through on here is what helps us cope. 

CBT is still available via nhs. You can self refer.

Purplelady65

Having read all your posts I agree with your NHS psychologist friend that you should take your wife to the GP - she sounds very unwell. I know that you don’t want to, for fear of the authorities becoming involved, but I just wonder what impact your wife’s binge drinking is having on your son? It can’t be a great environment for him to be growing up in. As another OP has said the whole family needs support. There is only so long you will be able to carry this burden before you’re burnt out and as OPs have suggested your wife may be eligible for certain benefits if she is unable to work due to her mental and physical health issues which would help with the household income.