Just found out that a friend’s wife has (apparently) unbeknown to him ran up debts to the tune of £98,000.

( A lot of this whilst he was working 14 hours a day overseas to feed her spendy habit!)

They’ve downsized their house and placed the debt in the hands of a debt management company who are paying small amounts off to the twenty-five or so credit card companies that she’s used (as well as taking their cut of course)

This has been going on for six years and he’s just paying the interest and getting nowhere.

My mate’s now doing, so he tells me, half a bottle of vodka a night (hardly ever used to drink) and looks shocking having lost huge amounts of weight.

I think he needs to quit the boozing, though that probably won’t happen immediately, flog the house and declare bankruptcy and take himself and family off to live in a council house, with a view to wiping the slate clean and starting again.

I, however, know nothing about this type of thing and this may well be shockingly bad advice, given that he may struggle to get a mortgage in the future.

Is anyone able to point me towards a good source of information or can offer any good advice?

He’s a really great guy and I hate to see his life going down the tube like this.

Any help much appreciated

I can’t believe how common this is, I know of at least 3 people in very similar circumstances 🙁

Are the debts in joint names? If it’s all in her name, I’d start by asking how she can become bankrupt without it affecting him – if that’s possible.

Mainly in her name but it appears that there are dodgy signatures in his name too on the cards.

I’d be factoring a divorce into it too.

If there is equity in the house, then kiss that goodbye along with any personal pension you may have.

Tot up your assets and what you are prepared to loose and then balance it against a payment plan.

Is the existing debt management company put them in an IVA or an informal debt management plan ?

If its the former, then that is usually capped at 5 years then the slate is wiped clean, but you do get to keep your house and pension.

The citizens advice Bureau is the best bet. They have specific debt councilors in most branches to give independent advice.

Hurry up though! Call-me-Dave, in his infinite wisdom, has just cut the funding to debt counselors completely. So they’ll be on’t dole soon. Good job we’re in a situation where nobody will need advice on managing debt eh? 🙄

Really? I’d be looking to cut her loose TBH! My vague (and therefore possibly wrong!) understanding is that personal debts incurred by one partner during marriage are not the responsibilty of the other if it’s in one name only.

iirc bankrupcy lasts 7 years. How much equity is in his house? Could she declare bankrupcy and leave him out of it?

Citizens advice beuro is the way to go

CCCS

Is a good place to start, and the CAB.

Bear in mind that these people are inundated at the moment with personal debt problems.

flog the house and declare bankruptcy and take himself and family off to live in a council house,

If he went bankrupt he’d only likely lose the house if it has value in it, and even then if there’s little equity in it arrangements can be with the official receiver. If they could afford to pay the mortgage after all the cards are cleared then there’s a chance they could stay put.

If the cards are in joint names it would really have to be a joint bankruptcy as the debt would just fall on to the non bankrupt partner.

I went bankrupt two years ago and it honestly saved my life, I was suicidal at the time. I’m in a much better place now.

You’ll get plenty of non-judgmental advice on this forum…
http://forums.moneysavingexpert.com/forumdisplay.php?s=0df31fb71eef42889e9b1c470c7ad44d&f=136

It is the wife he needs to get rid of.What about one of these creditors agreements than allow you to keep the house,and go into a limited bankruptcy but demolish your credit rating(might not be a bad idea)Where they pay a % back to creditors.Somebody I was at uni did this.
If they have had interest for six years then the debt management company have had a fair old chunk of what the will have paid for all the debt.
Disclaimer; I am a History teacher.

There are 2 problems here.

1. The Debt
2. The wife.

What is it that has caused her to run up such big debts? Sounds to me like its not much of a marriage if she doesnt care about how much she spends and they spend very little time together.

So if I were him I would get legal advise and perhaps see the Police as she has fraudulently used his signature. If the debts are on her name then they will chase her, however they can recover goods from the property where she lives, even if they are not hers.

Bankruptcy – People appear to enter in to it too easily these days. It will screw your life up for at least 6 maybe for the rest of your life. If she can declare bankrupt it will not affect him so long as they have no joint financial association ie bank accounts, mortgages, loans, cc’s etc etc. You can live in the same house as a bankrupt and it wont affect you until you get financial association.

But then there are things like house insurance, some companies will not touch you if a bankrupt person lives in your home. You will struggle to rent houses etc etc, you pay over the odds for everything.

Surely if she has rung up debts of £98k one or both must be on nice salaries, therefore a nice big house? Sell the nice big house, cars, in fact everything. Start from fresh in a smaller house and have 2-3 years of hardship.

Personally I would be questioning the wife thats the problem, not the debt.

Oh and meant to mention, has he got copies of his credit reports from Experian and Equifax? They will say exactly what their financial association is today, and give an indication on just how screwed he is from getting credit again. Although not banrupt yet, I imagine he will struggle to get credit any where if their is any financial association.

duntstick – Member

“Mainly in her name but it appears that there are dodgy signatures in his name too on the cards.”

Then add legal advice to the equation.

to the tune of £98,000

Nothing else to add apart from
😯 😯 😯 😯
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He’s a very forgiving chap and it would appear that the wife stays. (though a sound whipping wouldn’t be wrong) 👿
They are attempting to sort this out together, there are children involved too.

Thanks guys, there are some great things to mull over here and I will have to make my way through it all, if I am to be of any use to him.

I’ll obviously need more info about the debt management company he’s using too

Really chuffed at the response, thanks all

Surely there must be something to show for 98K. Can they not sell it to recoup some of the cost

Surely there must be something to show for 98K

Depends. My mates missus spent nearly 60K on coke, nowt to show for that. Except for a rather impressive trail of personal destruction 😕

Like Muffin Man says, check out MSE forum – should be plenty of wisdom and experience to at least give him some ideas.

When the house is taken off them, and sold at either auction or via an estate agents, and it makes a loss on its value, the mortgage company will look to the previous owneers to make up the remaining amount plus intrest in a few years time after they have been made bankrupt.

It happened to a mate of mine, and was an absolute strike out of the blue nobody told him about.

In Scotland you can get a protected trust deed ( think it is an IVA in england and wales). they will look at your income and your outgoings ( not including the debt repayments ) and work out how much you have free. You will then pay this amount for the next three years until you are discharged, you won’t be able to get any credit for a further three years.
The creditors have to agree to the reduced payments and you may get to keep the house if there are children living their. If the creditors don’t agree then it full bankruptcy.

project – that all depends on whether your mate voluntarily handed the house back to the mortgage company. They have sneaky ways to make you sign forms so you are always liable for any shortfall.

If the house sale was dealt with by the official receiver then no debt should be left after bankruptcy.

Nothing left, already downsized the house, cars gone and everything else.

I’m guessing a certain cosmetic procedure may have used some of it up, probably all they have left to show for it now.

They live in Northern Ireland.
I’ve yet to find out if they have any differences there in how things are done.

I’m guessing a certain cosmetic procedure may have used some of it up

A nice pair of norks can indeed make a man forgive a lot. They must be absolute belters for £96 grand 😀

This thread is useless without pictures.

When the house is taken off them, and sold at either auction or via an estate agents, and it makes a loss on its value, the mortgage company will look to the previous owneers to make up the remaining amount plus intrest in a few years time after they have been made bankrupt.

I think that is the mortgage indemnity insurance they want you to take out – it is to protect them, not the people taking out the mortgage.

I’ve yet to find out if they have any differences there in how things are done.

Ask on moneysavingexpert there are some very, very knowledgeable people on there, many from the dept crisis charities.

If you have dependents then you will probably be able to keep the house. If you have to rent you will need a garrentor (sp). If he can keep the house then bankruptcy seems like the best option. He has too much debt for an iva I think, and too many creditors to get them all to agree.

Surely there must be something to show for 98K. Can they not sell it to recoup some of the cost

I had to evict a tenant of mine. Because she didn’t think the eviction would go ahead, she left an entire household of stuff. All of it was tat, ordered from the Home Shopping Network or the like. When you added it up, it wouldn’t surprise me to think that she’d spent £100k on it over the years, but you’d have got almost nothing for it secondhand. As an example , there were probably 100 pairs of shoes, none of which were anything other than Jordanesque in their vulgarity. A lot of them were unworn, had the labels on them, and had cost £100 or less. Even if they’d cost an average £50 a pair, that’s £5k right there, which would have a resale value of maybe £2-300 if you eBayed them as a job lot.

There were any number of hideous dresses, same sort of quality as the shoes, worth even less. That was probably another £10k.

30 old mobile phones, all of which will have cost a bit over the years, all of which had been abandoned for the latest model, none of which would be worth much now.

Then there were the bille – £2k for Council Tax, £20k car payments (ok, so she had a car which could be sold), £1k mobile charges, £1k gas bill, £10k personal loan outstanding.

Essentially, it’s easily done if you persistently spend more than you earn, and it’s frightening how quickly it builds up. If you’ve managed to rack up say £60k of debt, interest and penalty fees (‘cos you’re not paying it back, obviously) could quite easily add another £10k in a year.

In the case of my tenant, I slung it all into the garage. It literally filled ALL of a lockup i.e. all the way to the roof, and packed in really tight. Some of it she collected, the rest I took to the tip.

we found out that friends of ours have debt of £380,000 !!!!!!!!!

I was ablsolutely gobsmacked!

To make it even worse they have absolutely nothing to show for it at all, not a single thing!

I was disgusted at their attitude to money!

God, I lose sleep over just a few grand of debt…

a mate of mine went bankrupt at 22 – all because he wanted a focus RS – he couldnt afford it but bought it anyway – lived off credit cards for a couple years had debt from a previous car he`d bought , insured third party and written off and then when he finally got advice the focus was worth next to **** all because he hadnt looked after it!

hes 25 now and life is back on track …. hes having a hard time getting a mortgage with his missus

we found out that friends of ours have debt of £380,000 !!!!!!!!!

I don’t usually contribute to these threads as I have no experience in these matters, but £380k – SERIOUSLY? HOW THE ****? 😯

Bankruptcy lasts a year and is relatively painless. Certainly less painful than trying and failing to make minimum payments for the rest of your life. Losing the house is far from a certainty too.

And I thought my missus was bad with £10k of credit cards!

380k is called a mortgage surely? When I went to get mine the idiots offered me 280k, the guy even said to my wife “I’m sure you can talk him into it at home later” I wanted to punch him, we borrowed over 100k less than they were offering as I knew I’d be stupidly stretched trying to pay back anything close to that amount, but not everybody is like me.

toby1, you would think so but sadly no.

seriously………….how the **** do people get into such debt??
i find it very alien, so much i dont understand how.

go straight bankruptcy, go not pass go, do not pass any iva or any credit counselling, even if they agree some sort of payment plan the debt will get sold on and they will get phone calls from dusk to dawn from someone who bought their debt for 1% of what it was and thinks they can turn the screw and get more out of them,

as mentioned previous the bankruptcy court might even let them keep a few assets,

so much for the end of reckless lending,

and the idea that someone should be allowed to spend and spend and build up such debts, then just say **** it and go bankrupt is disgusting.

did someone hold a gun to their heads and make them spend……….?