Husbands Surprise debt..help with best plan of action

Doxford2016 · 16 December 2019 at 12:12PM

Hi Guys

I recently discovered that since buying our first home 3 years ago my husband has managed to rack up a huge debt.
After buying our house we consolidate our credit cards etc into a £7k loan, but since then for various reasons and silly mistakes he has managed to get this total up to £32000 .. without me knowing.
We haven't missed any payments but I would say we are at tipping point and had I not found out and stepped in I think we would have started to fall into Arrears.

We want to know the best way to go forward.. here are the details ...:(

loan - 7% interest - £17500 balance - £394 monthly payment - £13466 settlement
loan - 23.8% interest - £2500 balance - £68 monthly payment - £1950 settlement
loan - 42% interest - £900 balance - £102 monthly payment - £820 settlement
loan - 48.1% interest :eek: - £1000 balance - £68 monthly payment - £900 settlement

credit card - 19.95% - £2250 balance - £77 monthly payment
credit card - 29.95% - £7500 balance - £185 monthly payment

Overdraft - £1.50/day when using - approx £30 per month

Combined earnings after tax are around £3k per month
Combined bills are: £1490 incl mortgage, car, energy bills, insurance etc

So currently hes paying £924 in debt bills which obviously isn't leaving him with anything left over.
We are in touch with stepchange and citizens advice but would like to get some first hand immediate advice.
We are not considering an IVA, having been homeowners for only 3 years we don't want to secure anything against our home preferably. Were in a 5 year fixed mortgage anyways so probably couldn't.

At the moment I am concentrating on clearing the credit cards first as the interest is accruing. But we are struggling to find ways to do so.

I have considered asking the 7% loan to be increased to cover the overs and over a term of 5/6 years which would bring our payments down to below £600 monthly. (I am clearing the smaller credit card myself so this isn't factored in)

I'd prefer not to damage our credit rating too much if we can avoid it (..mine is currently 924 - excellent.. for now

) but obviously we wouldn't be taking out any new credit (apart from remortgaging in 4 years) until everything was paid off.. if at all! and since I predict it will take us 5-6 years to clear, any adverse credit is likely to start dropping off at a similar time.

I'd just really appreciate talking to anyone about it and seeing what people who have been there would find to be the best course of action going forward.

thanks!!

Silvertabby · 16 December 2019 at 12:19PM

I'll leave the financial bit to others more qualified than I, but may I just say that the first thing you need to address is exactly how and why he has racked up £25K of debt in 3 years.

Gambling is the first thing that comes to mind. Have you had that conversation, and discussed how to deal with it going forward?

Doxford2016 · 16 December 2019 at 12:26PM

Silvertabby wrote: »

I'll leave the financial bit to others more qualified than I, but may I just say that the first thing you need to address is exactly how and why he has racked up £25K of debt in 3 years.

Gambling is the first thing that comes to mind. Have you had that conversation, and discussed how to deal with it going forward?

In his youth he racked up a similar debt with just being very silly and immature with money. And I think the same thing has happened again. I have had all the conversations regarding that side of things and it seems to come down to using credit cards again and again after clearing them with loans repeatedly and being too scared to say anything and therefore needing to take out more high interest loans and cards to cover up that he has no money.

I have requested copies of all of his bank statements and credit card statements so I can see exactly where the money is coming and going. and going forward I will be taking charge of all finances

curlytop12 · 16 December 2019 at 12:28PM

Hi, gosh that must have been a shock! have you found out what he has spent this money on, as I would assume he needs to address this as well as rectifying it. Anything he has bought you can sell?
could you complete a Statement of Affairs and post it here?
lemonfool.co.uk has a tempate you can format for here.
good luck, you sound remarkably organised .

Doxford2016 · 16 December 2019 at 12:33PM

curlytop12 wrote: »

Hi, gosh that must have been a shock! have you found out what he has spent this money on..... .

It was a huge shock, especially as im so good with money! He is terrible for avoiding things which has let it get worse and worse. I'm definitely addressing the root cause of the issues as well and by no means am taking what he has done lightly, or bailing him out but I just want to get it sorted asap and having a plan in place will make me feel much better!

I will get a SOA put together! thanks!

:D

MissMollyJ · 16 December 2019 at 12:50PM

It’s kind of you to take on responsibility because he can’t be bothered to -but ask yourself some serious questions about your life going forward. He has always done this and has no qualms about secretly getting you in the !!!! - I would be pretty confident that he will continue to do this even after you sort out this latest issue.

Having been in a financially abusive relationship before with my ex husband who behaved exactly like this for 15years before we separated and I ended up having to file bankruptcy due to debts that he had left me with, I urge you to consider this behaviour in a wider context and decide if this is something you are ok to have impacting on your life going forward, potentially forever.

Good luck
X

getmore4less · 16 December 2019 at 1:07PM

The SOA will help but there has been a lot of spending not in your current estimates.

3 years £3kpm net income and say £25k extra debt that's £133k
£1500pm covers £54k that leaves £79k(~£2,200pm) to account.

Try to work out where that has gone that will help identify the areas that need to be cut back/stopped.

Overdraft is probably the most costly debt you have along side the 48% loan.

looking the interest/charges

07.0% - £17500 balance - £394 - interest £102
23.8% -- £2500 balance - £68 -- interest £50
42.0% -- £0900 balance - £102 - interest £32
48.1% -- £1000 balance - £68 -- interest £40

19.95% - £2250 balance - £77 -- interest £38
29.95% - £7500 balance - £185 - interest £187

£1.50/day when using - approx £30 per month

payments total £924 interest £479

Depending on the outcome of the SOA and how much you have to play with there may be options

Do you have a CC you can use and pay off in full each month that would have no interest or charges?

Unless the OD is large you may be able to nail that and the 48%.
The 30% £7500 balance is the big problem as currently it is just costing £180pm and going nowhere.

Grumpelstiltskin · 16 December 2019 at 1:07PM

Surely if you can't account for anything he has bought with that amount of money there is a huge problem somewhere.

OK Hopefully the bank and card statements will throw up something, but if he has an addiction then he will have to be prepared to face it.

EssexHebridean · 16 December 2019 at 1:23PM

Ahh yes, that is going to be have been one heck of a shock.

You already know that consolidation doesn't work - and are now all too familiar with the reasons why, I suspect. Have all his credit cards now been cut up so that he CAN'T use them going forwards? And do you have his promise that this is definitely the case? If it were me, on the second of those points, I would also be making abundantly clear that he needs to be completely and utterly truthful with you from here on - and that is to include "lying by ommision" also. He also needs to understand that it is going to take a long while for the breach of trust here to be healed.

Yes - a full SOA is the first step. It might also be worth him signing up top the MSE credit club and the two of you looking together at whether there are any 0% balance transfer cards that might realistically be available to him. In the circumstance I'm going to suggest that it is probably best for you to NOT transfer any of his accrued debt into your name - I have to be totally honest and say that the way he has breached your trust here makes me feel strongly that - at this point in time at least - this is not a safe line for you to go down.

If you were happy to have financial input into sorting the situation then my suggestion would be for you to do that by increasing your responsibility for some of the household bills, so freeing up his funds for clearing of the debt. Taking control of your family finances generally is a good step to ensure that you feel more at ease with the situation - however do ensure that he is still involved throughout as that way he will see the work you are having to put in to enable you as a family to sort out the problems that he has caused.

Mojisola · 16 December 2019 at 1:27PM

bbbecca7 wrote: »

I recently discovered that since buying our first home 3 years ago my husband has managed to rack up a huge debt.

After buying our house we consolidate our credit cards etc into a £7k loan, but since then for various reasons and silly mistakes he has managed to get this total up to £32000

bbbecca7 wrote: »

In his youth he racked up a similar debt with just being very silly and immature with money. And I think the same thing has happened again.

£32000 in under 3 years and nothing to show for it all?

If he was buying things, wouldn't you have noticed?

If he wasn't buying things, how on earth could he get through that much money?

I'd be very concerned about an addiction of some sort - costs loads and nothing to show for it.

Doxford2016 · 16 December 2019 at 3:10PM

MissMollyJ wrote: »

It’s kind of you to take on responsibility because he can’t be bothered to -but ask yourself some serious questions about your life going forward. He has always done this and has no qualms about secretly getting you in the !!!! - I would be pretty confident that he will continue to do this even after you sort out this latest issue.

Having been in a financially abusive relationship before with my ex husband who behaved exactly like this for 15years before we separated and I ended up having to file bankruptcy due to debts that he had left me with, I urge you to consider this behaviour in a wider context and decide if this is something you are ok to have impacting on your life going forward, potentially forever.

Good luck
X

thanks, I'm taking on some of the responsibility of creating a plan of action because obviously having this hanging over us affects us both. He has been paying them off himself but it has left him with no money and he has been too scared to tell me. I will in no circumstances be taking the debts on in my own name. But obviously am financially linked through marriage

Husbands Surprise debt..help with best plan of action

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