To sell or not to be debt free.

Madammarini

First time posting so be kind.
My husband in his early 60’s ( but still working full time) has accrued nearly 15 grand of debt on high interest credit cards and loans. He hid a lot of the debt from me until recently and it’s not the first time this has happened. I have been guilty in the past of letting him deal with all our finances and he is terrible at it. 

He has had quite a pay drop in recent years and has not been earning enough and instead of discussing it with me, he has tried to get out of trouble and stay afloat by getting silly credit deals.
I have dealt with all of this and taken full control of our every day finances and luckily enough none of his debt is in my name.
i have a loan for £12 grand but comfortably pay it every month and have managed to reduce my overdraft to nil and even may have some money left over this month. I do work hard though and my credit rating is excellent .
The mortgage is in mine and my sons name as my husband didn’t have a good enough credit rating when we moved 2 years ago.
However my son has now moved out and his girlfriend had to get a mortgage in her name only.
Anyway to cut a very long story short, my husband is not earning enough to cover his debt repayments ( they are nearly a grand a month ) and he has been turned down for a loan to consolidate his debts .
I feel our only option is to sell our house. We have 100 grand equity and after paying both our debts and repaying my son a few grand he contributed when we moved last, we would have about 60 grand left.
without our debt repayments every month we would be comfortable and my hisband will eventually get some inheritance from his elderly mum ( about 50/70 grand )
my thinking is to rent for a few years and then buy a small property with our 60 grand equity and any inheritance . We may need a small mortgage but we will have a good combined monthly income as we are planning on working for a few years past retirement. House prices are fairly low in our area of South Wales. So we could possibly get a small 2 bedroom for £150 grand.
I will be sad to sell but I can’t see any other way out and I just want a solution and a fresh start.
Apologies for the rambling post. 

Any advice or thoughts would be welcome .

Voyager2002

The debts are your husband's; the house is not. There is no sense at all in selling the house to give the proceeds to your husband's creditors: they have no legal claim upon it, nor upon your earnings.

Please direct your husband to this forum so that he can receive good advice about getting an IVA and the other steps that are open to him. Meanwhile, if anyone bothers you about his debts simply say that they are none of your business and they cannot legally discuss someone else's debts with you. Whatever you do, please don't sign as a guarantor.

EssexHebridean

Generally speaking, regardless of how you do it, it’s a poor idea to turn unsecured consumer debt into secured - and essentially that is what you would be doing. It’s also a very poor idea to rely on inheriting money - these days it can extremely easily not turn it as you expect. You could by the sound of it risk ending up ina very concerning position if that inheritance doesn’t materialise - but worse than that, not going through the process of dealing with the debt also means that there is a very good chance that when needed that £60k probably won’t be there either. You clearly don’t want to move - so put that idea firmly on the back burner for now and let’s see if we can find you a far better debt solution. 

First priority for you is to sit down with 6-12 months of bank and card statements and put together your SOA (statement of Affairs) - this will set out your income and expenditure, show you exactly what you spend in various categories every month, and allow you to see how short you are for the repayments. If you use the “format for MSE” option and copy and paste into this thread, we can also cast an eye over, perhaps see if there are any savings you could make, and help you see the right way forwards. It’s important to make the SOA open and honest - it helps nobody if it’s completed using the figures that you think “should” be there. 

Allowing that you refer to also having a loan and having had an overdraft as well as the credit card debt your husband has amassed, would it be fair to say that as a partnership neither of you have been the most disciplined with money in the past? There is nothing particularly unusual in that, and probably the majority of households in the U.K. right now carry levels of consumer debt which are probably unwise. We normalise debt so much now it’s hardly surprising that most folk run bank accounts in the red almost without thinking about it - it’s seen as normal! 

Get cracking with the SOA. One further thing though - can we assume that most of the monthly payments to debt come out at the beginning of the month and so have already been paid for this month? 

sourcrates

Well an IVA is not the way to go either, neither is another loan, look, your using a sledgehammer to crack open a peanut here, a 15k debt can easily be sorted by debt management, no need to sell anything.

They are all non priority, unsecured debts, he has no assets, the lenders can`t do a thing to him in all honesty.

Have you not heard of debt management?

You repay your debts at an affordable rate, rather than at the contractual rate, over a longer period of time.

Please do some research, or get him to, its easily fixed, selling the house to pay this is way OTT.

Check out "Stepchange" and "Debt management".

RAS

You do not need to sell the house. You'll never get back on the market BUT, you do jointly need to tackle the debt, yours and hubbies. And intertwining your finances and your son's creates additional issues.

Get your husband over here to sort out his debt but also do check that there's not any mental health issue affecting his decision-making. If he's not earning as much, not able to buy stuff and keep up with mates it's easy to get depressed and may well feel it's useless trying to get out of the pit.

And with respect to your situation, you seem to be overstretched as well? Well done on the overdraft, but you need to check whether you can pay extra off that loan. But of immediate concern is that you appear to have no emergency funds. When you own a home, that's not wise. So, put this month's spare into an easy access ISA to start building a little safety net.

Since your son has moved out, have you considered getting a lodger? Not one of your son's mates, but someone working away from home a few days a week. That's up to £7.5k income tax free, and could make a big dent in your debts. There will be costs like extra lighting and hot water, but consider it?