Husband accrued 50k debt without telling me

shinelight1

Hi everyone 

I can’t believe I’m actually writing this but it looks like there is so much help on here, I am hoping I can get help to make a decision. We have a mortgaged house with about 40% equity. 2 children both around university age so will need financial support from us, which I am desperate to give. My MIL was in a care home for a long time and in short, although the house was sold and proceeds used for payment, the care home needed additional funds as top up payments.  Without telling me, my husband took out several loans to do this over a period of time, much longer than he’d thought as MIL was exceptionally elderly and ill but lived a long life, and has been paying them back ever since. He earns around 65k and me 45k. We have credit card debt of approx 15k (0pc) which we’d planned to consolidate. My husband has only just come clean about this awful situation and now we need to decide what to do financially (personally is obviously another issue).  Husband has has second charge approved in principle (via a mortgage broker) where we would pay back approx £500pm but even with our current mortgage, this would give us additional funds each month (which I now realise were missing due to him paying out over £1k each month of his own money). The second charge wouldn’t hopefully be forever as eventually when our fixed rates are up, we could ask current bank to add on. But as we are in our 40’s, this would mean we will be paying back this money for a long time and hopes and dreams possibly gone due to extra outgoing which I had never anticipated. Although I don’t want to do a second charge (due to risks involved) it would at least get things organised and cover everything for the immediate future whilst we whittle down financial reliance of children and consider our future. 

The alternative seems to be husband taking out an IVA which has obvious negatives but at least debt not secured on the house.

Ww will also speak to our current lender but long term I’m not sure they can help. 

Some of this might seem obvious to some but I am desperate to get some guidance to help me make my decision so please can anyone help? Thankyou so much. 

RAS

Please stop everything. Stop panicking.

Both of you.

Do not progress with the second charge and do not consolidate. Both are recipes for further problems.

I'm really sorry that your husband was forced to pay top-up fees. Those should have been picked up by social services when the money ran out. 

And I'm really sorry that he did not tell you. But you are where you are. And nothing dreadful will happen in the next few weeks.

The first thing is to complete a Statement of Affairs (SOA)  and let's look at what's possible

swingaloo

Please do not do a second charge. We did that over 20 years ago and then had to sell our house as the payments were not sustainable.
The charge was for £15,000 borrowed and even though we paid it fir 4 years the settlement figure when we sold our house was over £19,000.

Grumpelstiltskin

Agreeing with everyone else, do not put unsecured debt on to the house. 

You say that an IVA will not affect the house, you do realize after 5 years you will have to remortgage or pay an extra year into the IVA?

You say you want to support your children, now might be the time for them to realize money doesn't grow on trees and they should do something themselves to fund their lifestyle.

How much exactly is the debt now? You mention £15K, a small amount with your total income.

RAS

Grumpelstiltskin said:

Agreeing with everyone else, do not put unsecured debt on to the house. 

You say that an IVA will not affect the house, you do realize after 5 years you will have to remortgage or pay an extra year into the IVA?

You say you want to support your children, now might be the time for them to realize money doesn't grow on trees and they should do something themselves to fund their lifestyle.

How much exactly is the debt now? You mention £15K, a small amount with your total income.

The debt accrued to pay for the nursing home was £50k.

The couple also had £15k debt on 0% cards which they planned to consolidate, which suggests they don't understand the risks of their plans.

shinelight1

Grumpelstiltskin said:

Agreeing with everyone else, do not put unsecured debt on to the house. 

You say that an IVA will not affect the house, you do realize after 5 years you will have to remortgage or pay an extra year into the IVA?

You say you want to support your children, now might be the time for them to realize money doesn't grow on trees and they should do something themselves to fund their lifestyle.

How much exactly is the debt now? You mention £15K, a small amount with your total income.

Thankyou . CC debt (which I thought was all w were looking to consolidate) is approx 15k but husbands newly announced debt is £50k. My children are working part time but can’t do anymore with full time study. I would also like to try for us to retrieve husbands situation before involving them but am aware that we will probably have to discuss with them when we know more. 

shinelight1

RAS said:

Please stop everything. Stop panicking.

Both of you.

Do not progress with the second charge and do not consolidate. Both are recipes for further problems.

I'm really sorry that your husband was forced to pay top-up fees. Those should have been picked up by social services when the money ran out. 

And I'm really sorry that he did not tell you. But you are where you are. And nothing dreadful will happen in the next few weeks.

The first thing is to complete a Statement of Affairs (SOA)  and let's look at what's possible

Thankyou for your kindness  re the 15k debt, we were not necessarily going to consolidate but reviewing all options eg extend mortgage terms so lower outgoings each month etc and then pick up again when we were in a better position. But I now realise why we aren’t in the position I’d thought. Thanks for your link but it’s says it’s a broken one - is there somewhere else I can fit it?

RAS

Please put any idea of an IVA out of your heads. Given your incomes, he could well end up paying back the entire amount and have to pay the £9k IP fees on top. Those advertised reductions only really work if you on a very low wage.

Add in that the IVA budgets are very tight and you are unlikely to be able to fund your children on an IVA. They are just not flexible.

If you want to reduce you children's university costs and they are A students with good mental health, suggest they try for Oxford or Cambridge at well endowed colleges. Board and lodging at c£5k in many places. The workload is vicious though.

elsien

Just to doublecheck that your mother-in-law is no longer with you and he is not still paying top up fees. Third party ups are voluntary. There is no obligation on anyone to pay them and if he was told that there was he was misinformed. I do wonder if there’s a complaint to be made there depending on who gave him that information? 

shinelight1

elsien said:

Just to doublecheck that your mother-in-law is no longer with you and he is not still paying top up fees. Third party ups are voluntary. There is no obligation on anyone to pay them and if he was told that there was he was misinformed. I do wonder if there’s a complaint to be made there depending on who gave him that information? 

Yes MIL died in 2023. He was paying top up fees for 5 years. The care home was very cheap comparatively and apparently he was told there were no other spaces available in a non self funded home, as she hadn’t reached the threshold. Personally I also want to make a complaint but unsure who to do so. The council are unlikely to want to know as she was self funded and husband says hw signed a contract which agreed to the top up fees. So pretty sure we’re shafted on that front unless any lawyer knows more!

EssexHebridean

Link to the SOA calculator is in my signature below - I'll check after posting that one works in case there has been a change to the link that we've not picked up on. 

I'd echo that it might be worth your husband exploring the possibility of a complaint relating to not being informed about the top up fees, however if your MIL was settled and happy in the facility she was in, a refusal to pay those fees might have also left her open to being required to move elsewhere - I know we were told that was a strong likelihood when my Great Aunt was in a care home and we were beginning to be concerned about her funds running low. If so, I can certainly understand why he might have felt the only option was to pay.

Should he have discussed this with you? Absoutely - but I think you need to take a step back and think why he may not have done. possibilities from posts we've seen on here in the past from the debtor's perspective include
"I'm frightened my OH might leave me if I come clean about the debt"
"I thought I could pay things off myself from my own income but it got out of hand"
"I thought it was only going to be a short lived thing and would be gone before it became a problem"
"I felt it was my responsibility to deal with it"
None of those things make it right that he didn't talk to you sooner, but they all also need considering - and only then can you make an educated decision about how you need to react, I think. On that aspect, take a step back, take a breath, think (and talk) things through. 

As others have said, don't take unsecured debt and turn it into secured - that would be an incredibly poor decision. You don't need to rush into anything, so definitely (again) take the chance to think and talk things through before you make a decision. The SOA is the key thing which will help you to work out your options so make that your priority.

Are you 100% sure that you are aware how the 15k CC debt occurred, too? It may have been due to a big one off which for whatever reason either wasn't, or couldn't be budgeted for, but on the other hand it might have been due to consistent overspending over a period of time - no shade on your for either but you do need to be clear about identifying that as it is now part of the problem. That it's on 0% is good - keep a tally of dates of the 0% deals ending and ensure that you search for replacement deals to transfer for any of that debt that won't be cleared by the time the deals end.