Cant you get her to go down the IVA route. This will to an extend help the missus whilst protecting you should the worse happen, it would also stop her from being able to obtain further credit until this lot is paid off. Not sure of the knock on effects to you and mortgage renewal time.
Thanks again for all your input.
Many and varied solutions and thoughts. All useful in a way to getting me to a decision.
I think debt management with a view to getting a fixed payment plan set-up or some of the debt wiped off is preferrable to getting the debt stuck on the mortgage.
My wife runs her own business and seems to manage that better than her personal finances.
I do love her and she's not a nasty person. She admits that she's rubbish with money. I think this is the tool to get her to address her relationship with money.
Stuart
Both of you should go for debt counselling, and your wife should continue with the cbt ask the therapist for advice is the cbt working as it should? Your wife could d go to her gp and ask what help is available on the nhs
think debt management with a view to getting a fixed payment plan set-up or some of the debt wiped off is preferrable to getting the debt stuck on the mortgage
No need to pay a debt management company to do this for you as the CAB will do it for free. They deal with this sort of thing all the time and creditors respect their involvement.
word of warning for IVA's, I work in the mortgage and credit industry. How IVA's work is that they default all the debts, default is normally when you can't make payments and the credit companies send the debt to a collection agency. Once all your debts are defaulted the IVA companies step in to negiotate lower payments. This means that her (& yours) credit score will get a lot worse. She will be turned down for any and all credit and so you will you. As you're married and living in the same property in credit companies eyes you are a joint liability, regardless of who applies for the credit. So if you do have to remortgage or move house you will struggle. Like I say even if you apply for the morgage in your name alone, you will be turned away.
My ex had £75k in debt which i suddenly found out about, fortunately house was in my name and there was documentation to show that I had paid her money to keep afloat and she had contributed nothing to the mortgage.
Actually at the end of the day the fact I was paying her summed her up nicely.
(Oooo i feel better after that)
Do I 'let her stew in her own juices'
Do you love her? If you can't forgive her **** ups and help her get back on track, then it seems not.
EDIT and after reading the thread...
I do love her and she's not a nasty person. She admits that she's rubbish with money. I think this is the tool to get her to address her relationship with money.
This is good thinking 🙂
has she got a canoe?
🙂
Loved the canoe comment as well.
Good job we can still smile 😀
You're married, its [b]your[/b] debt now too.
Two things, make sure it can't go higher and look at how it can be serviced as cheaply as possible.
Where you have separate finances it can be a problem if one person earns far less and/or has a 'lean' time - but as others have said, communication is needed.
Wish you luck.
[i]You're married, its your debt now too.[/i]
+1
Deal with it, but my advice would be keep it away from the mortgage.
And if you can't cope, well, there's always some garden remodellng you can do.
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This means that her (& yours) credit score will get a lot worse. She will be turned down for any and all credit and so you will you
This is not the case for a trust dead. Her credit score will get wrecked but yours will not. she will not be able to get credit.
Are you in Scotland or england / Wales
I ran up 10k on cards a few years ago, which I'm now very close to clearing completely. On the whole, I don't believe I have mental issues (beyond the well documented ones). It's startlingly easy to do.
Holidays, little treats when I've had a shit week, emergency funds to cover disasters, buffer when out of work, work expenses going out on the card and back in to my bank account, baling (now-ex) partners out of the crap when they can't make ends meet, etc etc; even with ten quid here and twenty quid there it racks up surprisingly fast. If your balance is increasing each month, even slightly, it's a slippery slope. Then, woe betide if you get into trouble and start missing payments, it starts to snowball really fast.
Sadly I couldn't agree more. Racked up about £8k myself in surprisingly short space of time, not much to show for it either. The killer was always when money was tight, that it was all too easy to just use the credit card to pay for shopping or petrol or a bill to "tide me over", when actually I really needed to sit down and work out what I could and couldn't afford to spend each month. £25k will have taken this woman longer, but people can't rightly judge without knowing the full facts, or even having experienced a similar situation themselves I'd say.
Of course, there may well be much bigger issues behind that need resolving, but I'd say the OP's first call should be to reassure her that he loves her, and that they can make it work out together. That is not to say he just bails her out, but I think in this case it sounds like she had actually been crying for help for a long time, just that poor communication has stopped her actually communicating with him, and the CC became an easy fixer of pain.
If you've ever suffered from mental health issues, or depression, you will know that sometimes, even if on the face of things it's not financially the best thing you could do, you need to give yourself a little pickup. I'm not saying retail therapy is the right course of action, far from it, but managing to treat yourself once in a while can and will make you feel better about yourself... THE KEY to doing this successfully is managing to ration it to affordable levels. When you set yourself a limit, its surprising how far you can make a mere £10 a week go on "frivolous" purchases, and your tastes quickly adapt to much more meagre levels. And then you make if pay for itself, by cutting out other things... The £40 a month phone bill can easily be trimmed freeing up a few quid, the "necessary" Starbucks coffees go into the frivolous purchases fund, walking/riding to work (if close enough) saves fuel expenditure, shop for the basics at ALDI/LIDL instead of buying everything from Sainsbury's/Waitrose/M&S etc etc. Also use the "one in one out" tactic. If she wants a new handbag, she's got to sell an existing one first and the new one is only allowed to cost £20 more than what she sells the old one for, for example...
There's several ways to skin a cat, but firstly getting control of her spending and at least bringing it to easily manageable proportions (and cutting her credit cards up) is a good start. If you use shock tactics, and she's literally never allowed to spend another penny without your express permission, it would be too strong, and you'd have a whole other problem on your hands I expect! She needs to be weaned off her expensive habit first.
Anyway... Good idea above too about ringing CC companies. Forget the debt management agencies, they only exist to make money out of people not clued up enough to manage debts themselves and they make a lot of money doing it! Ring a credit card company, plead hardship, say you're going to struggle to even make the minimum payment in the future and you think you're going to start defaulting, but then say "my dad has offered to lend me exactly half what I owe you, can you make a settlement agreement?" Or something to that effect, and you'd be surprised where it will get you... £25k of CC debt doesn't necessarily mean you will be paying them back £25k if you get me. Leave it on the cards, and keep paying the minimum each month, and it could cost you twice that (as it could rolling into the mortgage too), but if you can free some cash up to pay them off tomorrow, you could end up paying only half what you owe.
Get her down the Citizens Advice Bureau ASAP too. They'll know the best way to deal with your exact situation when you explain it to them.
With any luck, something good may come out of this, and you and your wife may actually significantly improve your communication with each other and end up with a stronger relationship as a result.
You're married, its your debt now too.
+1
If you're not there to share her problem (and it is most definitely a problem, both financially and in terms of how she ended up where you are now), then what's the point of marriage?
She's screwed up, presumably as a direct/indirect result of some other issue, finally come to you and you have a chance to fix the problem together and help her get past whatever it is that's led to this. Maybe i'm missing something, but isn't that what being in a committed relationship is all about?
Sorry OP, just realised that made it sound like I was suggesting you were not there for her! My post was directed at those suggesting you should ditch her
Could she have used it to help the business?
Seriously take Steve-Austins offer and contact him.
Don't put the debt on the mortgage. Or if you do then get £25k taken off her cut of the house.
For me runnning up £25k debt on CC would be enough to end the relationship on, but if it's already shakey then definitely bin it.
Are you sure that 25K is the total of the debt ?
There's a child involved so do your best to stay together .
Few people seem to have remembered that there is a CHILD involved here who needs a Mum and Dad. When I was a child and my parents used to row, the prospect of them separating was the most terrifying thing ever for me.
If the OP wants to save his family and he loves his child, there's no question of separating and ditching the problem. He has to take positive steps to resolve his wife's spending because a marriage is supposed to be an economic partnership and if one half of it isn't playing the game, they must be made to address their problem. If he fails, well he's tried at least but if he succeeds, his wife might just get her life back on track and a stronger realtionship might emerge from it.
They stood up in front of their families and friends and took the oath "for better or for worse, in sickness and in health".
Call me old-fashioned but marriage isn't supposed to be something you just ditch if it's not going well.
Make sure you take a good look at yourself too.
Does your frugal nature become controlling where money is concerned. Perhaps you need to change your ways to help your wife.
My parents had a similar problem. Chalk and cheese where money was concerned, too much budgeting can drive a care free personality to start hiding things and the viscious circle continues.
Will take time and effort to sort it all out but hopefully you both will benefit from the experience.
You're married, its your debt now too.
Not in the eyes of the law.
If you can somehow manage it in her name to begin with that's the best course of action. Then if it proves too much and bankruptcy becomes an option the receivers are only entitled to her half of any assets (this was a massive advantage to our family when I had to close my business 4 years ago).
Only put it on the mortgage as a last resort.
For better advice ask on here...
http://forums.moneysavingexpert.com/forumdisplay.php?s=619fa009ac8cd18e9f1dd49b93dad53d&f=136
Ignore that fact its the bankruptcy section - you'll get some great advice.
And call CAB or StepChange (formerly CCCS) - DO NOT GO TO A DEBT MANAGEMENT COMPANY!
Its really time to get to the bottom of the relationship and find out what future there is. After all its only money and yours, hers and your childs future happiness is so much more important especially if you both want to stay together.
You may be having relationship problems because of this debt which has obviously been worrying her.
Of course you can add it to the mortgage but will you always be looking at the monthly mortgage statement and being annoyed by it?
Probably better to get her to contact a debt management company who will negotiate payments plans for her with the companies as they will accept a payment plan much lower than the total amount of the debt and certainly wont be charging any interest. This will help her to manage the debt effectively and she will not be able to get any more credit for a while which is obviously a good thing.
This is obviously a bit you and her but she has been spending it on herself so although you are married she has been secretly storing up this debt which isn't very open and sharing.
Hope you can sort it out in a way that is best for you both.
p.s. All though the government wont admit it we are in a depression, not a recession, and this is going on all over the place and is not uncommon.
This could be positive and you could build on the opportunity that this presents in addressing both the issues in your relationship and her low self esteem. Together you can resolve this but you need to make a pact to beat it and avoid the instances when she blows cash unnecessarily. But this is serious change to save your relationship and rescue your finances and it will be difficult. Divided you fall united you stand etc etc.
So apart from addressing it together with lots of communication, particularly when she is at the moment/place of blowing cash - that is when she phones you for support and a chat. Get rid of all the credit cards. Find a solution to the debt, there are plenty of people or organisations that can help you decide how to achieve this.
I'd be off!!
You never know, coming clean about her total debt (and other issues maybe) could be the turning point in your relationship and might unblock the communication problem. It can be a very cathartic experience.
If you add up everything you've got as well as counting your debts you will realise that in overall terms you're better off than about 5 billion other people on the planet. maybe not as well off as you were a year ago - but who is?
You could even try a sort of celebration, maybe a weekend away as a sort of "end of year audit" once it's all out in the open.
Mate of mine got married and after a year found his wife had racked up debts of £180,000 on online bingo and the like. He was not skint but it completely wiped him out and he ended up with a loan of £25k to finish it off.
She went back to gambling after promising to go to gamblers anonymous and he's now single again...
OP - I'd gently enquire where the money went. Make sure it wasn't anything like this.
To all those saying make sure she's only got a debit card now, that's not the answer either.
My mate was exactly like this, he'd spend on loans, cards, whatever as long as he had a way to move the problem on when someone came calling. It all got too much and he just stopped paying. There were no assets there as he'd consolidated all car loans etc into a bank loan so nothing could be repossesed.
Once he got married his wife took all cards off him. It absolutely had to be done. Money was dished out at an agreed rate and anything above and beyond that had to be discussed and agreed. He was removed from all joint cards and bank accounts.
As crazy as this sounds, you're the only one in the relationship who can manage money. You have to make a stand on this one (if you're taking on the debt) and get agreement that the spending stops unless you agree it. It will cause arguments BUT you have to get her on a budget and stick to it or this problem will not end until you've lost her and possibly your house - even if you split she's the mother of your child who I'm sure you won't want to see homeless and up the creek.
If you don't stop her spending it won't stop - about 8 years on my mate has just come out of debt, it was hard on them, but I'm fairly sure he still won't have any kind of free reign on cash.
And sorry to add but make sure you go through everything - if this has just come out it's fairly likely she hasn't told you everything yet...
I went out last night but just had to come back to this thread this morning to see where it ended up.
There's some really excellent advice on here and I applaud the posters on this forum for their good sense and obvious experience! They say web fora are the virtual equivalent of having a pint down the pub with your mates and with threads like this I wish we still drank at pubs with mates every evening and belonged to pally social clubs because despite the internet I think we actually lead increasingly socially isolated lives.
To the OP: what are you going to do, now you've slept on all this advice?
A friend of a friend went through something similar. His wife ran up a lot of debt, he knew nothing til she was up to her neck. They consolidated, and for five years he worked all the hours he could to get it paid off. A matter of weeks after they finally get it paid off (well, he did, she didn't work) she turns round and says 'this marriage isn't working' 👿
As mentioned previously no need to pay a debt management company. I used to work for an IVA company and when they couldn't 'help' (i.e. setup an agreement and extract fees) they referred to CCCS who now appear to be called stepchange who are a debt charity:- [url= http://www.stepchange.org/ ]http://www.stepchange.org/[/url]
I have not read all the replies but the debt advice is always don't turn unsecured debt into secured as that can put the roof over your head at risk, my ex wife did the same as we we divorcing..I refused to help her and she ended up loosing lots of her divorce settlement to pay back what she owed.
If I had helped her out that debt would have also become my problem...sound like she needs to go to one of the debt charities for a repayment plan, it will stuff her credit rating but that should be a good thing as that's what's got her into this situation
You mentioned she also ran a business. Do you know if the debt is all personal or whether she's been using her credit card to prop up the business? That is quite common at the moment.
TBH in the same situation I wouldn't let myself fall into the hands of some parasite like a debt management company; they are only in it for the money and why thrown good money after bad? I would contact the lenders and arrange to meet to discuss the repayments; most are reasonable people and will appreciate your efforts to resolve the issue and not run away.
A lot of very good advice above.
A few points: OP the way you are talking about your wife is as though she has her life, you have yours. You have already said you don't communicate. So you do need to sort your marriage out. Do you want to be part of her life or not?
Re debt, it sounds like the mortgage is in joint names? If so not only her credit rating is screwed but yours too, so it would be VERY unlikely the mortgage co would let you add £25k of debt.
If you don't have a joint mortgage or currently any joint financial association make sure you leave it that way, its the only way you will manage to get credit as a couple, or if you split.
Bad credit will stay on your file for 3 years after debt paid off.
Personally I can not understand a marriage where you don't have shared accounts etc..
I don't think I can add much to the advice above, but if it was me, I'd want assurance that she was taking steps to change her ways, and come clean on what she's spent it on. Otherwise that person would lose my trust. £25k might be a "small debt" to some, and I understand how credit card fees can spiral. But, it sounds quite big to me. It amounts to about everything I have financially, and I have never been in debt. I can see 5-10 K being racked up on nothing in particular if you buy bits and bobs for yourself beyond your means, but 25K?
debt is a terrible thing, easy to say that people should know better but it's also very easy to find yourself in a spiral of debt that out can't get out of. It's very easy to point the finger of blame, but it would seem that the OP and his missus are going through some marriage problems......people cope differently, some drink, some take drugs, some spend money.
I've been there (the debt part, lost job etc) and am currently working on getting myself out of it. Depending on the area the OP lives, there are options other than trying to extend the mortgage, Trust Deed for Scotland, IVA for England (i believe.....Google for more info) where the issue is down to the person, not the couple losing the house.
It's not the end of the world, but I wouldn't be taking on any debt for yourself as your marriage doesn't exactly sound solid and you don't want to be saddled with her debt if it all goes tits up
There are different types of debt management companies. The largest charge no fees and get paid by a rebate from the credit card companies for arranging voluntary agreements. These companies don't advertise but are recommended by CAB etc. The ones which advertise are just sharks which charge fees for a service you can get for free and have no interest in sorting out the problem in your best interests.
On our last skiing holiday we shared a chalet with the CFO of one of the legit companies and it was quite an insight into the industry....
Don't stick it on the mortgage unless you can help it. £25k of unsecured debt (the cc company's problem) suddenly becomes £25k of secured debt (your problem). As stated previously, speaking to CCCS could be a good call.
If u love her , you said it for better for worse ,its only money my wife's a **** when it comes to shopping but I guess I knew that when I married her
To the OP: I'd struggle with the deceit myself, but only you can decide on that one. I was screwed over by a gf many years ago and the truth was a lot more than she first admitted to...
I'd get professional advice, both on your marriage and on the finances. If she racked up the debt I would have thought it's only fair for her to sort it out (esp if she has her own source of income from the business) so not sure of the rationale for it to be loaded onto the (shared) mortgage.
Good luck...
@rajboab Did this ever get resolved? I couldn't stand for this, I don't think even love would make me take the hit as well as her but then again I guess you don't know until you're in the situation. An IVA seems like the good option here. 'Individual' being the operative word here. It will help her out a lot and I suppose the role you'd take here is support, and nothing more. [url= http://www.clarkebell.com/personal-debt-advice/individual-voluntary-arrangement-iva/ ]Here[/url] explains an IVA pretty well (UK). Or [url= http://www.trustdeedscotland.net/what-is-a-trust-deed.php ]here[/url] for trust deeds (Scotland). Either way, good luck.
