Likely heading towards a need to default - Impact on spouse

abaka

Hi,

So over the last 2 years I’ve been working towards clearing my debt.  Took it down from about 60k in 2022 to just under 20k last summer.

However last year due to some good news on the job front I went on a splurge which not only slowed my debt repayments down for a few months but also added a few more grand to it.

I then had to take a loan out to get some needed home improvements we needed and wouldn’t have had enough in savings to cover it.

So again my debt has risen to about 30k again.

i estimate I can pay it off in 2.5 years.

but I’ve noticed a struggle I’m running out of time on two cards that have high balances, and worryingly I’ve noticed lately that I don’t have as many balance transfer offers as I did a few months ago.

I basically need to do a balance transfer of about 7200 and 7800 in December.  As of right now I do have offers on cards that could take the balances but I’m worried if the time comes, will those be gone also.  (Or in December I might have better offers, that’s the risk I’m playing)

if I can’t transfer I will not be able to make the minimum payments.  At the minute, my debt is spread around 8 cards plus the loan I have.  I pay the minimum on all the biggest and then snowball from the smallest.  

But the interest rates if applied to the two large ones would kill me, and i think the end of the road is near for me and im going to have to consider letting some debts default!

my question is,  mu wife and I have a joint  account and mortgage.  None of the debts are linked.

if I default and go on a DMP.  Will my wife lose access to her credit cards.  She uses them well unlike me and I’d hate to see her lose them!  I get that because of our financial link she might struggle to get new credit but neither of us would be applying for anything new anyway.

I’m just so worried that this could break our relationship if I do default as I’ve been telling her even when I took the loan for the house my finances were fine and I was 2/3 years away from being out of the mess.  But I now realise it was never in my control and I’m at the mercy of getting 0% offers.

this is all hypothetical because Decembers outlook might be more rosy.

Grumpelstiltskin

Yes if you have  joint accounts it is possible she will find out.

I hope you have canceled your credit cards, keeping a credit card open whilst trying to repay debts is the beginning of a slippery slope as you have found out.

II think you should tell your wife, what did you spend on, will she have noticed you were spending? Marriage is a partnership and both parties need to be honest.

Rob5342

I think you should lay it all out for her to see. It might not be easy but then you can put your joint efforts into sorting your situation out instead of trying to tackle it all on your own. Don't let things descend to a point that could be avoided if you tell her now. 

abaka

She knows about the debt, but I've always been telling her that it is in hand and it has been (subject to balance transfers) which I now realise how that I've been playing russian roulette for about 5 years now always relying on the 0% balance offers.  I know she will find out, I wouldn't enter into a period of not paying and a DMP and not tell her.  I'd be honest, but I just don't want it to affect her.  She has credit cards that she's had for 20 years and manages them very well, so I'd hate for her to lose something due to my stupidity.

I've looked at my credit file and it's showing some major concerns.  4 of my accounts are showing as using 50% of the available balance, because I recently lowered the credit limit on a few.  Realistically, 2 of these will be well under 50% in another month or so, so that might improve my offers again in a few months time.

Secondly I also have opened a new loan for the house repairs/improvements and a new M&S Credit Card which I did a balance transfer on in recent months so that is having a slight impact also but it says the impact of that will stop being a factor in a few months.

So here's hoping that I can either keep the offers I have now or have better offers come December.  However losing just one more balance transfer means I don't have enough of a hand to shuffle with.

it has built up over 6/7 years and just constantly balance transferring.  I could identify some things but by and large it's just legacy.

I haven't cancelled the cards - but I don't have any of them physically or added to my electronic wallet.  My last purchase on one was in August when we were on holiday (as it had 0% on overseas transactions). I don't want to cancel them as I need the balance transfers.  Arguably I could cancel and get betters offers but that's too big a risk considering I'm not even getting offers for ones I have.

fatbelly

Her credit cards should not be affected. There is a chance that her credit limit could be reduced but if she pays off in full each month she will be fine.

Sounds like you need to let her have more control over the family finances.

abaka

She has said that herself. 

We put a lump sum into the joint account to cover mortgage and bills.  I do pay more than her because I earn more.  Secondly the home improvement loan I took out which works out at £150 a month is me paying that completely on my own. 

I have talked to her today about it and she’s adamant that I will not be going down the DMP route that we can use savings (hers I don’t really have any) or using her balance transfers if needs be.  

I just really hope it doesn’t come to either. Solution and I can just continue doing what I’m doing.

getting another 12 months in December is make or break for me because if I get another 12 months to transfer the large balances I will have cleared the other stuff and will be able to make a huge dent in them that even if I had to pay interest after another 12 months I’d still be able to clear them.

Guess between now and December is going to be mighty interesting  

abaka

So today.  I noticed another two balance offers that were there yesterday have vanished today.

I have looked at an option which might save my !!!!!!.

i could borrow enough money to wipe out my credit card debts from my local credit union.  This would cost me £260 a month but it’s for ten years.  I would obviously be overpaying this to try and reduce it down and I reckon I could feasibly have this gone in 5 years, and also means the flexibility across the length of time means I’d have more money spare for enjoying my life as I’ve been more or less consumed with repaying debt the last few years

It also comes down to if the CU will lend me the money.  I have £10k in savings with them but I’d be looking to borrow 30k but their loan calculator and terms say this should be feasible.

going to speak to someone today to see if this option will prevent me from going down DMP route

if I do get it.  I’ll be cutting up every single credit card I have