Wife is in so much debt(180 Posts)
I've just found out, that via a number of credit cards and loans on items, my wife has nearly £40,000 of debt I didn't know about.
I was led to believe the cards were under control, paid off and generating cash back.
It turns out that after the money we share for joint expenses, everything each month goes to making the minimum payments and more is constantly being borrowed to do this - her monthly take home pay is less than what is needed to clear this.
I have inadvertently been paying for food and treats for both of us for weeks, which is how I I found out about this when she could not take it in turns or split costs. There is nothing in her current account and she has had to take built up cash (more than she contributed herself) from the account we pay our bills from to cover charges made by her bank.
I have some savings and she's talked about using these to pay things down so that the interest is not as high. Am I selfish not to want to do this? I can see it being swallowed up and if the spending continues, we will be worse off. I'll also need it, as it seems she has no income left and I'll be subsidising her living.
I don't think givemesteel needs to grow up at all. The advice is draconian, but it would work - however, it's something that the wife here would have to agree to. It also has the potential to infantilise the wife - but since she's already shown herself to be utterly incapable of handling her finances herself, she might be grateful for a period of respite regarding the financial responsibility!
I actually agree with most of givemesteel's post as well, possibly bar the "sell everything you can" - if they can afford to sort it out without selling everything, then they should; but if the OP's wife has a pile of stuff that she's never worn/used etc. then yes, try and recoup money on it.
I've seen people who are spendthrifts buy stuff because it makes them feel better, and then never wear/ use it, it just lies around in carrier bags. An ex of a friend had real issues with her weight and would buy clothes in her target size, which she would then not ever get to, so she had a whole wardrobe's worth of clothes that didn't fit her. Many of these were never worn, still in the bag.
But I don't agree with the "punishment" aspect of "sell everything" - because it does look like that, if it's stuff the OP's wife has attachment to, even if it's not of great standing such as an heirloom.
I think you've got the right idea OP. Esp with you taking charge of all monies until further notice.
After getting advice from CAB, oen thing that could help with debt payments is gamification, or making it a challenge. If you head over to the Debt Free Wannabe side of the MSE forum you'll see how others have managed to clear debts of 100,000 and above.
I would be careful about handling her finances and just giving her allowance. It can turn on you in the end because she could play it as an economic abuse. They are now considering defining financial/economic abuse as a domestic violence in new legislation. That's a good news for many, but in this case it would be easy to twist what you are doing into that.
My gut is that I don't want to leave - apart from the obvious deceit, she's answered truthfully, if a bit vaguely. I've seen the info from the lenders. There's nothing against our house and my Experian score is still high (I've never borrowed). CAB appointment next week and she's receptive to the idea that I'll control the finances apart from taking her salary and handing it back in chunks, as that would empty her account further and cost her more interest when calculated. Struggling not to feel 'abusive' as one poster mentioned in not allowing spending, but I suppose that's what she needs me to do.*
OP, I think that sounds sensible and not abusive at all. She will need to learn to manage money differently and that's easier when she has someone restricting the amount available to her and holding her accountable for what she does with it. I would try to get into a habit of monthly (or even weekly) family budget meetings where you BOTH share details of income and expenditure and make plans for larger purchases or debt repayments. As her financial situation gets back under control, you can continue to have the meetings but she gradually can take more responsibility back for her money.
I have a friend whose ex-husband did this (spent it on porn sites initially and then didn't manage the interest on the borrowing which I found unbelievable as its pretty easy to access porn for free but anyway). They borrowed from her brother to repay it and lived a very frugal life for about 6 years, kept their house etc and got back on top of it. However, he has clearly resented her being in control of the finances and they are currently getting a divorce, him accusing her of financial abuse (which is a bit rich really). I suppose my point here is that if you stay together you really need to be careful how you handle the "financial control" - at the moment of course she is eating humble pie and will do whatever you say but going forward no one likes to be treated like a child so its important at a later date you discuss in detail how this has made you feel and why you need to keep control of the finances going forward and perhaps she should explore what prompted her to behave like this in the first place.
op no one spends that kind of money on bits and bobs
They quite possibly could. Haven't read the whole thread so I don't know how long it's taken to build up, but if it's a few years, and loans have been taken out to pay off credit cards that have been built up again, a significant chunk could be interest, charges and possibly even PPI.
So it could literally be a few tens of pounds of overspending a week that's not in the budget - a bit extra shopping, a meal out, one item of clothing a week, like the OP suggests.
I haven't seen PPI mentioned - the OPs wife should see if she can reclaim PPI using the resolver tool on moneysaving expert. People have had thousands of pounds repaid, so could knock down a big amount.
Maybe counselling for shopping addiction as well as professional debt advice would be worthwhile?
She says she's receptive to the idea of only having access to the money she is 'allowed' to spend. That's a good idea if she needs help to not overspend - when it's gone, it's gone.
I can't see if you rent or own OP, but if you rent, bankruptcy might be an option to draw a line under the matter. Charges will stop accumulating and she will get a 3 year income payments order that will take most of her disposable income, but will still leave her with a little spending money. Or if she in theory does have enough disposable income to pay her debts, a debt manangement plan with frozen interest could be the way to go. CAB will look at all her finances and advise accordingly. Either way, she will be pretty much banned from new credit for the next 6 years, so will be an excellent opportunity to learn to stick to a budget.
Can she sell some of the excess things she's bought? Or maybe start a cheap hobby to take her mind off shopping?
Three months after our marriage i discovered my husband had £40k of secret debt. My mil paid it off but his attitude towards money / bills and not paying the. never changed.
Get solicitors advice and then walk away. Im ten years down the line. In fact, run.
Op no one spends that kind of money on bits and bobs. She may need professional help with a shopping addiction before you can both move on,
This occurred to me as well, it's such a large sum of money. I don't know if she'll be able to stop buying without help.
No, it sounds silly, because if it was something like that it would be joint effort to save, you'd hope.
The reason I think it's bad advice is because it puts the op into the position of being controlling. As with anything, change and motivation for change has to come from the person fucking up.
Flip givemesteels post on its head for a moment and assume OP and spouse needed to urgently save £40k to make a major lifestyle change, eg operation, get on the housing ladder, save their business;
- her selling everything that is worth something. No exceptions other than if is her grandmother's ring or whatever.
- give up the expensive hobbies, and things like gym membership and expensive nights out until you have hit your target.
- get financial advice and follow it.
- pay only the minimum salary into your current account to meet living bills and the rest goes into an ISA.
- if you find out she's taken money out of your savings and spent it or taken out another credit card or bought something extravagant then it's over
Doesn't sound such bad advice now, does it?
I got myself into a lot of debt with credit cards/loans then vicious cycle of taking out more to pay off others before you know it you are out of control.
Best thing I ever did was contact StepChange to set up a Debt Managament Plan. You just pay them an amount each month you can afford and they pay your creditors.
I’ve paid off nearly 15k in 2 years. I wouldn’t have even touched the interest if I had carried on and probably would have had more debt.
Your wife needs to take some responsibility and face her debts!
I will say what would be massive for me is the deceit here. My husband has always known about my debt even though it is something I was so ashamed of.
If your wife isn’t willing to be totally honest and make some changes to start dealing with this I would be reconsidering my relationship.
Do not use your savings. And advice do not have any shared accounts/ joint account otherwise your credit rating can be effected or companies could see your savings as assets to be used to pay debts.
I'm surprised that I'm being told to 'grow up'. My dh and I have had a period of financial hardship and I gave up basically very nearly all fun stuff and spending as did dh, and neither of us had built up 40k of unnecessary debt.
It really isn't that difficult and I didn't say anything fun at all, just extravagant stuff, as the op said him/herself that the wife had expensive hobbies and had to have the best of everything.
Ultimately I think the op's wife is very lucky the op is willing to give her a second chance, so if it's going to work they have to know things are going to change and protect themselves.
For the people poo pooing givemesteel s suggestion, i had cousins in a similar scenario. One of them (A) had a ridiculous amount of debt and was in danger of losing his house. Another ( B) really helped him sort stuff out. B went through all his bank accounts and insurance policies and made sure he was not paying unneccessary insurances or tariffs, and got loans considated. Then B took control of As bank account and cards and gave him an allowance. A went on holiday but B had sanctioned a maximum amount he was allowed to spend. It took several years but A cleared all the debts and is up to date with a payments.
It is very much about trust and betrayal when you are in the situation which is why OP and DW need to do everything to make sure it doesn’t happen again. OP can only do it if he has complete trust that DW wants to clear the debt and stay debt free.
My XH went bankrupt twice, once before I met him and again after he left me. It didn’t happen whilst with me as I wouldn’t spend money we didn’t have!
It’s hard to stay in a marriage when the trust has gone, for whatever reason. If OP wants to stay then DW needs to accept that.
Come on. 40K is probably a fraction of what the joint mortgage is.
The thing to decide is whether you, as a couple want to solve it.
I am pretty sure divorcing and starting again won't be hardly any easier than fixing it. I think you need to discuss it seriously, and find a way of working it through. If you are both working, it will be Ok.
Everyone saying ltb might be a bit harsh. It depends how important money is to you.
No it isn't, it's about trust and good judgement. Trust is pretty much the basis of any marriage.
I'd much rather be in a relationship with someone who earns peanuts, but who is honest and lives within their means, than someone who earns a lot but spends it all and more on useless crap and lies about it.
I would have posted exactly the same as I did
Pretty much everyone has said they would struggle to get past this. Especially with no kids involved
If this was a woman saying her husband had ran up £40k of debt and lied about it leaving the wife to subsidise him everyone would be calling him all the bastards under the sun and asking “have you left him yet?” Etc
Another one who agrees with this.
But fair play OP if you want to stick with her.
My partner and I are similarly positioned and fairly high earners (>£150k pa income) but this is terrifyingly large debt and I would probably leave.
The thing I find weird is she seemingly has nothing to show for it...Debenhams and eBay aren’t high value sites in that it would take a long time to rack up £40k
I can't even imagine debt on that scale...!!
We've cleared our debt over the past 12-18mths (£15k) that was a mixture of CC, OD home loans and car finance. God it was hard, will NEVER ever borrow ever again.
In your shoes I would think fuck vanity and go all out to clear it up. No Hols, No posh cars, No Labels. and plenty of beans on toast!!
The quicker the debt goes, the quicker you can both move on.
Givemesteel has written sensible advice. DW needs to understand she can’t afford stuff which of course means giving it all up. She needs minimal access to money if she can’t control her spending.
She’s jeapordising the roof over their heads, there’s no way OP should not take control of the finances, he has to !
I’ve seen someone build up £40k, get bailed out by family to avoid bankruptcy, then build up another £40k and go bankrupt anyway!
That's madness, givemesteel - yes, she needs to take responsibility for her debt but making her his dependent, treating her like a naughty child and removing every pleasure is not sustainable and reduces their relationship to a dictatorship.
@givemesteel grow up! The guy is asking for help and what you have written is laughable
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