Doubling the debt

Happyoldie · 19 August 2018 at 8:11PM

Good evening, I am hoping to get some advice on my situation.

I am a 51 year old guy, divorced 8 years ago with 2 grown up kids. For the last 3 years I have been in a relationship with a lady, similar age to me, divorced with kids etc. We met at work and our relationship has gone from strength to strength.

Following my divorce in 2010, I was able to get a small mortgage and have a small 2 up 2 down terrace. It's not a mansion, but it's mine. I left the marriage with significant debts of around 50K. I managed to keep these stable for about 3 years but have been tackling them more aggressively since. I currently owe around 30K . The debt is now well managed and I switch to 0% deals etc when I need to. I have a decent job with a salary of 48K per year.

We are at the stage where we would like to live together. My partner also works full time and earns a little less than me at around 40K. She lives in her own place but only has about 20K of equity. She also has 50K of unsecured debts - a legacy of her previous marriage.

The plan is that she will sell her house and use the equity to clear 20k of her debts, taking her debts down to 30K. She will then move into my house with me.Her mortgage and household bills currently cost her 1200 per month, so the plan is that she will use this money to throw at the remaining 30K. The reality is that without this option she would have needed debt management as she was barely making ends meet. She will contribute to the food
but I will pay the bills until her debts are sorted. My money situation is sorted so I am happy to do this.

Does this sound like a good plan? Ultimately we are going to be a 50 plus couple with 60K of debt, so I feel that we need to do something now in order to be able to enjoy our retirement together. Neither of us expect to retire before we are 65.

I suppose the other option would be for me to sell my house and use the equity to clear her debts altogether, however I am not keen on this route.

middleclassbutpoor · 19 August 2018 at 8:48PM

As you have both experienced - relationship breakdowns are difficult and can leave you financially in a difficult position.

The good thing I like about what you are thinking - she is taking responsibility for her debts and not you.

The bit that makes me feel sightly uncomfortable with what is being suggested - what is stopping her just going further into debt again when she feels 'better off'. I.E. are you confident that the ability to live within her means. You appear to have been able to do so but the post doesn't give enough info to say whether she has.

I would not under any circumstance take any responsibility for her debts.

I would also not become financially linked by joint accounts for bills etc. If she is going to sell and repay her debts - you should remain financially independent.

By keeping things separate and clean, you will avoid a lot of stress should the relationship not be so strong in the future. Apologies if it sounds all very cold.

sammyjammy · 19 August 2018 at 8:53PM

If her mortgage is £1200 currently then she will also have other bills on top of this, its great that you want to help but maybe more reasonable if she also pays half of the bills that way you both gain some financial assistance and you can repay the remainder of your debt a little quicker.

Ergates · 19 August 2018 at 11:23PM

sammyjammy wrote: »

If her mortgage is £1200 currently then she will also have other bills on top of this, its great that you want to help but maybe more reasonable if she also pays half of the bills that way you both gain some financial assistance and you can repay the remainder of your debt a little quicker.

Especially as bills will likely rise (a bit) with 2 people in the house.

Happier_Me · 20 August 2018 at 8:07AM

Maybe sounds harsh but I would go into this with a longer term view - surely she should be paying her way a bit more! She's on a decent income and so should be contributing to half your bills (excluding mortgage and maintenance). For a 2 up/2 down, splitting the council tax/utiltilies and food won't be a significant sum on a £40k salary.

Budget...Aim to have about the same disposable income after debt repayments. Avoid lifestyle inflation until the debts are gone - you'll both be a little better off after all, it's easily done.

No joint accounts as someone else mentioned.

Don't pay anything off for her, you have your own debts to service.

Don't get married to protect your assets (house and pension)...some may consider this contentious I know, I consider this sensible.

enthusiasticsaver · 20 August 2018 at 8:18AM

Financially it is a very good deal for her. Less so for you. As others have said you have managed to live within your means and are reducing the debt. She has a slightly lower income higher debts and presumably significantly less equity in her property. As you see yourself as a couple though and are less than 15 years from retirement I can see the logic in letting her sort this. My view would be though she should contribute to the bills except the mortgage by paying maybe 40% as a reflection of her lower income as your costs will go up with two of you and you now struggling will not help matters. She is still getting a good deal and needs to show she is reducing the debts by at least as much as you are dealing with yours. Clearing £60k over 15 years is entirely doable but don't forget your pensions. When does the mortgage finish? I would also suggest you don't get married until this is sorted and protect your house. Once bitten twice shy and all that.

MEM62 · 20 August 2018 at 11:20AM

venison wrote: »

It looks on paper as if she will be getting the better part of the bargain tbh

It would appear so, but she is also taking the much bigger risk. If the relationship fails where will she live? I am not suggesting that the risk justifies her advantage - just pointing out that there needs to be a plan B for her in case things do not work out as the couple would like. I would suggest that she rents her place for a while and throws whatever she makes at the debt.

Mnd · 20 August 2018 at 3:22PM

venison wrote: »

It looks on paper as if she will be getting the better part of the bargain tbh

This was us 14 years ago. Took everything on as joint when we started living together. Never regretted it.

(I had no debts and she wasn't in as much debt as your partner, so the situation may be different I accept )

Suseka97 · 20 August 2018 at 5:09PM

You've been in the relationship for 3 years and are really the only person best placed to judge this. Whilst its helpful to hear other points of view, which have hopefully given you food for thought (as you asked) -you have to weigh up the pros and cons. I'd agree that your partner would be taking a risk in selling her property whilst you keep yours, even if (on paper) it appears she is getting a good deal. You should both sit down and consider the options and maybe do as one poster suggested and rent her property rather than sell.

Whatever you decide I wish you luck - you've got a sensible head on your shoulders and I'm sure you'll make the right decision for your future and that of your partners

Doubling the debt

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