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Just found out extent of DHs debt.

(33 Posts)
NoPenniesLeftToCount Mon 21-Jul-14 11:24:33

Am a regular on MN but have name changed.

DH's debt is massive, double what I thought. People live off less. He's setting up a new business but this is personal debt and I don't know when he will be getting money coming in. I knew this would be the case and I've been covering the mortgage, childcare, etc during this time, but I've just found out I may lose my job in a couple of months, and there's not much comparable pay-wise around here.

I've always been really careful with money, but not in a relationship it seems. We've talked about the debt and business plans before, talked through options of managing the debt and I thought everything was on track, but it appears not. We have to remortgage early next year and at this rate there isn't a hope in hell. He's just continuing to rack up the debt by continue to pay maintenance for his kids and paying off bank loans. It's been a crap few months, not spending anything, not being able to take the kids anywhere. I knew it would be a tough few months until the business got off the ground, but I wasn't expecting this level of debt. It's going to take a few years to pay off, even if we both had money coming in. He's got his head stuck in the bloody sand.

I own a house I let out, but that's my safety net if anything went wrong between us, not for bailing him out because he keeps ignoring the debt.

I'm so cross with him. I feel completely trapped. How the hell do we (HE) get ourselves out of this? All hopes are pinned on the business, no other option will pay it off angry.

Clutterbugsmum Mon 21-Jul-14 11:36:43

Do not sell your asset to cover his debts. He needs to come up with a way of paying them off.

Can he put the business on hold and get a job with a salary to clear the debts, and not adding to them.

thenightsky Mon 21-Jul-14 11:39:24

Don't sell your house.

CogitoErgoSometimes Mon 21-Jul-14 11:39:44

Sorry you're so stressed. I think you have two separate issues really. One is the nuts and bolts of the financial crisis which sounds very serious. There probably is a way through which will include selling the house you let out. The cost of servicing the debt will be digging the hole deeper by the day so, if you have assets, now is the time to realise them. The other - and I'm guessing that's why this is on the Relationship board - is that your DH hasn't been honest with you about the level of debt and is not taking responsibility for it. With such a poor attitude you must be wondering what else is he not telling you? 'Head in the sand' is not a loveable trait in someone.

Are you questioning the future of the relationship?

NoPenniesLeftToCount Mon 21-Jul-14 11:43:13

"Do not sell your assets off"
Thank you, that's what i need to hear.
If he's going to do the business it needs to be now. Window of opportunity and all that. He might be able to do some freelance around it, but he's been looking for a while and there hasn't been much around, or that he's been offered.

NoPenniesLeftToCount Mon 21-Jul-14 11:46:57

I've posted here because i think one issue is about being in a relationship with someone who clearly struggles with managing finaces. Not convinced there's other stuff he's not telling me, i just have to prize things out of him sometimes. He is very good in all other areas, just his personal financial management sucks.

NoPenniesLeftToCount Mon 21-Jul-14 11:47:36

Bloody phone. Excuse typos.

EarthWindFire Mon 21-Jul-14 11:48:10

He needs to speak to the creditors and come to an arrangement with them for paying it back.

Something is better than nothing.

seagull70 Mon 21-Jul-14 11:51:55

How did you find out about the debt?

Do not sell off any of your assets!!

CogitoErgoSometimes Mon 21-Jul-14 11:55:00

By other stuff he's not telling you I really meant things like business plans, income prospects, that kind of thing. If his head is in the sand and he struggles with finance, it's likely that he's being unrealistic about the potential of his business venture full stop. If you've got everything pinned on the business and he's simply not a businessman then you're in the soup

HellonHeels Mon 21-Jul-14 11:59:56

I agree with the others - don't sell your assets.

Ask him to get his credit report and share it with you - that should show all his current financial situation and you will see exactly what the debts are.

Immediate priority is for him to do a budget so he knows what he needs to pay out and what money he has coming in.

I know he is starting a business - is there a proper business plan for this? How was he proposing to maintain an income while settingup and establishing the business? My opinion is that if he doesn't have paying work, he needs to get a job with regular income right now and set up the business as a sideline.

The debt free wannabe board on Moneysaving expert is superb at helping people address debts over the long term. He could have a look at that for advice.

ouryve Mon 21-Jul-14 12:13:29

I've experienced the consequences of people with this sort of lack of financial acumen running businesses. Contractors don't get paid, customers don't get the products or services they paid for, tax doesn't get paid and then the company folds, leaving even more debts. Self employment sounds like a pretty foolish and irresponsible move for your DH, regardless of how favourable the timing appears to be.

NoPenniesLeftToCount Mon 21-Jul-14 12:14:13

He's fine at managing business finances, and his business partners have solid financial experience. I think he just can't be bothered with the detail of his own. Or is too scared by it.

ShineSmile Mon 21-Jul-14 12:21:46

Don't sell your assets. You also need to have a serious chat with him, and write everything down.

hamptoncourt Mon 21-Jul-14 18:09:43

How long have you been married? It is possible your other property would already be considered a marital asset.

If I were you I would have a quiet private chat with a solicitor, just so you are armed with appropriate knowledge if the shit does hit the fan.

Good luck.

Pickledradish Mon 21-Jul-14 18:20:55

Yes, ring fence your assets so your house won't be used to pay his debts.

BrunoBrookesDinedAlone Mon 21-Jul-14 18:24:05

'Not convinced there's other stuff he's not telling me'

Famous last words and all that...

Not only would I not sell that house, I would be looking at a way of ring-fencing it from being considered a marital asset or liable for the pot in any way.

You may need it one day.

MrsKranky Mon 21-Jul-14 18:27:48

Give Stepchange a call. They'll be able to work out how it can be paid back and if your house counts or not. You don't need to go for any plan they suggest but you can ask then the question. You can even web chat with them.

ovaryhill Mon 21-Jul-14 18:29:51

I would go to citizens advice, they have specialist debt advisors who are brilliant

BeforeAndAfter Mon 21-Jul-14 18:31:20

I have heard great things about Debt Management charities. They help people to put payment plans in place, teach them how to liaise with their creditors to negotiate realistic payment plans and so forth. If you want to remain in a relationship with him then you will need to lead him along this path I feel, for your own peace of mind and then you will have to shadow everything he does to meet the payment plan.

Do not sign anything he gives you without reading every piece of small print going. Debt makes the loveliest people do the strangest and most desperate of things. My best friend was totally legged over by her ex-husband and he had her sign loan documents and all sorts - he had plausible reasons for each loan/second mortgage etc and she trusted him because she loved him. When she uncovered the extent of his debt and they parted she was legally liable for 50% of it because he had kindly taken out loans etc in joint names and defaulted on the joint mortgage too. Make sure you know that the mortgage on the roof over your head really has been paid.

In my experience people who are bad with money are bad with business. They seem to think that the first thing you need to run a business is the latest computer, the latest high performance car to 'look the part' with clients, the latest gadgets and toys. This is all bollocks because all you need to run a good a business is a good idea, a service/product that someone wants to buy and then the staying power to plug away at opening doors which can be the most disheartening bit. Again, most people who are bad with money are bad at plugging away at opening doors because they like instant wins and instant gratification and when you're running your own business the grunt work element doesn't normally suit their personality type...

You need to be all over his finances I'm afraid and making sure that no liability is in joint names and that he really runs the business as he claims. Under no circumstances should you bail him out. The only way he has a chance to change is by tackling his debt the responsible way, with a debt management plan - just google this and you'll find loads of help.

Depending on how bad his spending habits are then you might even have to keep his cards and dole out pocket money to him. It sounds grim but I don't think you have any other choice if you want to stay.

HumblePieMonster Mon 21-Jul-14 18:35:46

If you are married, isn't the asset (the house you own) a joint asset?

magoria Mon 21-Jul-14 18:39:37

If he has massive debts why the hell is he starting a business that will not have any income for the foreseeable future.

He needs to get his thumb out and job hunt at the same time in the chance of at least having some income in a couple of months.

It is downright stupid of him to continue this with the risk of you losing your job and the only income.

Otherwise you are going to end up losing your current home.

Money is a massive deal breaker for me having watched my mother be bled dry by boyfriends/husbands. I could not have a relationship with a man who risked the roof over mine and my child's roof.

Ememem84 Mon 21-Jul-14 18:50:27

Agree. Ring fence your house. If possible set up a trust and shift ownership to that. It could be seen as marital assets.

Optimist1 Mon 21-Jul-14 18:51:07

Terrible situation you're in, Pennies. I agree with those who have said if at all possible you should ring-fence your assets, if only because while your DH is going into financial free-fall you need whatever stability you can lay claim to.

Not that I disbelieve you but I've never met anyone who's smart in business who lets their personal finances run riot. The cost/cash flow/profit mindset is pretty ingrained, IMO. It's good that he's been honouring his obligations to his children, but to have taken out so many bank loans that it's crippling you both is very, very irresponsible.

Sorry I have nothing constructive to add. sad

BeforeAndAfter Mon 21-Jul-14 19:03:55

Honestly I don't think you can 'ring fence' assets unless you have the money to spend on the correct legal and tax advice and even then I think it would be dubious. The best thing you can do right now is make sure you don't put anything in your sole name into joint names, don't bail him out without a plan that you're in charge of, don't let him take charge of anything - you cannot and must not trust him financially - and make sure that his future business debts (they will accrue) are sitting within a limited company so they stay there.

You need to dig to see if your shared house has been used as collateral for these loans he's taken out. Trust me, banks don't lend money on the back of debt or future business earnings. They usually like a nice big juicy asset like a house to act as collateral. That would be my biggest worry right now in your shoes.

Has he been declared bankrupt before?

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