Found out we’re in huge debt.

[Inahole]

Hi,

in a state of shock right now. 4 days ago I found out that we are £100k in debt not including our mortgage.

Ive noticed that DH has not been himself for about 3 months- constantly tired, appearing stressed and losing weight. He’s prone to a bit of anxiety and depression and takes medication.

wevd been married 15 years. We have a mortgage, 2 kids, 2 cars and appears to be a nice life.he’s a lovely guy who would do anything for me and the kids

I knew we had done debt and that it was ‘a lot’. I knew it worries him but also thought it was under control and totally manageable.

dh earns about 97k. I earn 25k so our income is decent.

he broke down on Thursday and admitted how much we owe. I am shocked, angry, devestated etc etc

he confessed that it’s become harder to manage and he’s missed some payments/paid late. Our mortgage is totally up to date thankfully.

he’s a wreck. Crying, shaking and telling me that he’s let us down. I’ve been through everything and I can see that it’s been spent on life stuff abs nothing dodgy- gambling etc . I know that he has no dirty secrets other than the debt amount!!

my close friend colleague thinks I need to leave him and start afresh away from the debt. My mum thinks that it’s my problem too and it’s not something to end our marriage over.

any advice?

Contact Stepchange, get on a payment plan, and stop spending above your (considerable!) means!

I agree with everything suggested on previous posts:

• Go through your spending & make cuts/swap to cheaper deals etc. Plough any savings you make straight on to overpayments.

• sell any old household equipment, kids toys, clothes etc and put towards debt payments.

Look at your lifestyle luxury spending and redice those so if you put holidays etc on credit cards then cut those. You may have already paid out for summer holidays but if you have anything booked for later then cancel those if you won't incur fees.

Cancel all credit cards and set budgets for birthdays, groceries, christmas etc. Tell people now that you're only buying for immediate family and kids only.

Download the Debt Payoff Planner App (light blue background, dove flying is the icon).
Set up the free version.
Input all the debt you have and their interest rates and duration.
The app will calculate the best way of paying them off and give you end dates for each debt.
You input each time you make a payment.
It's great to have the visual representation as you see the debt decreasing and also give you very clear accountability for your financial situation.

I would be giving that 'friend' a wide berth, who leaves their husband after they accumulate debt for the lifestyle they choose to live, not that you wouldn't still be liable for it anyway. This is on you as well for leaving it all upto him but you know that now. It will be a challenge but it won't take that long to pay off on your household income, your lives will change as DC gets older and needs less childcare, you'll be in a position for promotion to abetter paid role etc.

OP, what a horrible shock.

Assuming your H has been in charge of the bills and admin up to now and if general disorganization on his part has been a problem, then you need to take the reins.

After you've dusted yourself off (which you need to do ASAP), you need to take the time to find out where exactly the money has gone, who the creditors are.

Get all the bank statements you can lay your hands on.
Get all the credit card statements.
Get all loan statements (car loan, etc).

Identify subscriptions and any charitable donations.

Identify streaming service bills (music, media).

Identify phone service and phones.

Identify optional expenses like coffee/ lunch at work/ birthday or Christmas gifts/ entertaining friends/ eating out/ attending shows, cinema, horse racing, moneybspent on outings eith kids, misc events.

Identify private school fees.

Identify the holiday budget.

Identify gym and club memberships.

Identify services you pay others to perform - gardening, cleaning.

Identify money spent on nice gadgets - gaming devices, coffee machines, newer model cars, TV, etc.

Identify money spent on hobbies - bike, crafting, running gear, sport equipment, pony, etc.

Identify lifestyle expenses like clothes, shoes, bags, ties, branded items, etc.

Identify money spent on landscaping, home decorating, etc.

Identify memberships - zoo, NT, museums..

^ These can all be trimmed significantly.

Identify your essential bills - mortgage, house and car insurance, utilities.

Tot up your fixed expenses.
Set a low food budget.
Look at school fees if any.

Identify where savings can be made immediately.
You need to trim a heck of a lot and pay off the debt.

Trade in your cars for smaller and cheaper used models (but watch out for lease terms).

Cut back on the food bill - shop at Aldi, start buying store brand stuff, meal plan, batch cook, cut way back on alcohol, fruit juice, fresh fruit, branded items, snacks, etc.

You are not alone OP I suspect there are many, many homes in this situation. It be resolved but it will need you both to be honest and to understand your finances better. It sounds like you have both been living beyond your means and burying your heads in the sand for some time now. You have a decent household income but your outgoings are obviously not sustainable. You must have an idea about things like cars, holidays, home improvements that have snowballed and added to the debt. Do you have loans or finance that could be renegotiated or consolidated - perhaps get some advice on making the debt manageable. Have a look at essentials and then all non essentials - holidays, meals out, subscriptions and reorganise your finances. You need to take control as your DH is incredibly stressed and the last thing you need is him being unable to work.

You've had a lot of replies already OP and it's probably very overwhelming for you.

One thing I would suggest, once you've had some time to process, is that you restructure your income and outgoings so that savings, or in this case debt repayments, happen automatically and not just if it's feasible at the end of the month.

The simplest way to do this is to have both of your salaries paid into a joint account which doesn't have a card attached to it, or cut the card up. All your unavoidable expenditure such as your mortgage repayments and utility bills come out of there. Shop around to make sure you're getting the best deal on all your essential bills, and if you're not, switch. Cancel anything non-essential such as Netflix, Spotify, Sky or the gym. When your phone contract expires keep your phone and switch to the cheapest SIM only deal you can find. Any minimum payments you need to make on the various credit cards should also be set up as direct debits to make sure you're not getting any late payment fees. If possible, try to change the payment date for your credit cards to the next working day after you get paid.

You then transfer an agreed amount out of that account each month onto a prepaid cash card, like the ones children have, for day-to-day expenses. Be reasonable about how much you will need to spend on things like food and petrol but err on the side of not transferring enough and needing to top up than transferring too much and continuing to fritter small amounts away on a chocolate bar here or a coffee there. Because a prepaid cash card doesn't have an overdraft facility, you can't unconsciously overspend because when the money is gone the card will just be declined.

Setting it up this way means that the default position will be that any money you earn which isn't being spent on essentials will stay in your account. The goal is that you get to the end of the month, perhaps the day before you get paid, and you empty your joint account and put whatever is left in it towards the most urgent debt. Then the next day you get paid again and the whole process starts again. This should mean you're paying off the maximum amount you can afford and not having cash balances sitting around in your bank accounts whilst racking up more interest on the credit cards, but you're not going to accidentally go overdrawn on your current account either.

I think you need yo look as a family about you taking control of the finances. What has he spent it on? Is he a gambler?

I agree with your mum and with the PPs who’ve said that this is salvageable if you put your mind to it.

The debt is less than your annual gross income and your home is safe. Gambling and drugs, addictive behaviours, don’t feature.

It’s not an abject disaster, this.

Blimey op even if it was due to overspending he should have told you long before now the extent of the debt so you could have reigned things in.
That's a hell of a lot of money dont you have any sight on joint finances? It's not on your bank account so how's it built up? Loans? Credit cards?

Loans credit cards consolidation repeat repeat repeat!

I knew it was high but not that high

Overspending ?

100k

That's insane

If you least had cars , a new kitchen , a baby (ivf) etx then wouldn't be so bad

But

You earn well

So you owe a years salary basically

Can you earn more

How old are kids and any paid childcare

You need to write down every essential and stop the rest till a chunk is paid

I'd be bloody furious actually
Joint overspending or not one person hiding the impact from the other and independently taking on more debt is pretty unforgivable in my view

Thanks for the posts guys.

I feel like I’m in a fog. I’m terrified and feel like everything is falling apart. I’m so ashamed too. My mum and friend know but not the true amount. I feel like we’re the most indebted people in the world

If it’s lifestyle related, then you are both living beyond your means sadly. You both need to sit down and figure out how you can start repaying this debt. Go through every bank statement, bill, credit card statement etc from the last few 12-18 months and see what you could cut out.
Do you need 2 cars? Can you switch to a cheaper supermarket? Can you chance energy companies etc?

After you’ve figured out this out, then see if you can make any extra money. Take on more hours at work for instance? Ask friends or family if they can loan you money and pay them back.

Then prioritise your debt repayments. Which debts have the highest interests? These you need to pay off first. Contact these companies and see if there is any sort of debt/loan repayment advice or a plan with them you can put on place.

You need to make radical changes and stick to a tight budget to get out of this going forwards. Maybe you even need to sell and downsize your home to stop this snowballing. If you can’t increase your income (not always likely) then you need to decrease your outgoings.

Well said. I only ever used a debit card until I got married and then got a credit card (just for the air miles so I can book flights cheaper for free). This taught me well for the future and that I can’t spend money if don’t have it.

Once you've got over this shock, contact Christians Against Poverty. They will help you without any judgement at all. They also offer budgeting courses. They have seen it all before and worse. There is no point in beating yourself up (or your husband) - you need help and a plan and you will get through this.

How much equity is in your house, OP? How much are the repayments on the debt per month?

It's a big debt, but your joint income should see you right in a few years if you agree a plan together and start being more sensible.

Go to Money Saving Expert and go to the debtfree wannabee board on the forum. You will see people who had your level of debt and how they have dealt with it. There are people with personal experience and people who deal with debt professionally. You have a good income, you will be able to sort it, you aren't the first to fall into a debt trap but you can get it sorted. Good luck I know it will be hard but you can do it.

Depending on how big your mortgage is, this is salvageable but you both really need massive changes to your spending, money management and general common sense.

If neither of you the attitude or ability to turn it around, you need to seek outside help from a debt advisory clinic as soon as possible.

Given you got into this situation, have nothing to show for it and earn a decent income, I really think you need to speak to experts who can help you manage, plan and budget.

How much is your income each month? 7k?
How much are your fixed outgoings? Mortgage, childcare, bills, etc?

You can pay this back through budgeting very carefully. Yes it’s a lot, but the debt is less than your combined annual salary. You’re not in a ‘debt crisis’ until your debt is greater than your income, according to Martin Lewis. You’re in a dept spiral. He has some advice for this:
https://www.moneysavingexpert.com/loans/debt-help-plan/

You're almost certainly not. There's been a few news reports recently about a big increase in people in six figure consumer debt.

It happens to lots of people and, for those posters who think that the OP must have had loads to show for their debt, it sounds like it's built up over time and, the repeated consolidation and missed payments probably mean that a lot of the debt, possibly as much as half, could be interest and charges.

Break down the remaining £50k over a 5-10 year period then means that you're talking about an overspend of around £1-200 pw, out of a total budget of thousands a month, which could be as seemingly inconsequential as an extra meal out each week, maybe a top up shop, couple of lunches etc, the sort of spending that many people do without thinking. A bit like an extra biscuit a day means that you end up gaining a stone in weight a year and after a few years you find yourself five stone overweight.

You didn't end up in massive debt overnight OP, so it will take a long time to get out of debt, but hopefully you'll learn new habits along the way and come through financially much stronger with sensible budgeting being second nature.

How much did you think it was and didn't the previous amount bother you? Did you ever discuss the debt with DH and figure out how to repay it, or did you just leave it all to him?

There is a bright side to all this OP.

If you take control of the finances and sort it out, the pair of you will be truly equal partners. He's obviously good at earning it, and you'll be good at managing it.

That's genuinely worth having and something that will make your marriage stronger.