How can I limit my liability

[d.j]

My partner I I have been together for 15 years and have three Children. 18 Months ago she informed me of around 25k's worth of debt luckily with some juggling I managed to transfer the value onto our joint mortgage. Recently I have found out she has run up another 25k worth of debt and I am struggling to come to terms with it.
My questions are these.
1) Our property is worth 40% more than our mortgage. Should I tag this amount back onto this?
2) Am I as her partner liable for this debt?
3) Is an IVA a possible solution to stop her from getting credit for 5 years?
4) How can I limit my liability as I am the only one who can be relied upon to protect our children's futures.

Any advice is a bonus at this time.

[Martin2011]

That's a very tricky one d.j. The starting place has to be you and your wife discussing the problem together, to see if you can agree a way to manage monies most effectively. Your concerns seem well founded and it doesn't seem fair that you have to keep bailing out an avoidable situation, and if it doesn't change you might eventually exhaust your equity and be facing very real borrowing, which I'm sure you'd both prefer to avoid.

Very best of luck resolving the situation, hope it works out well for you.

Martin

[Adam Davies]

Hi
You are not liable for her debts.
What is the equity in your property and what is her share of that[presume 50%]
An IVA is only suitable if she is actually insolvent rather than just having a spending problem.
You can limit your liability by not agreeing to any joint loans or accounts.I would also take legal advise about equity share if you do,again,remortgage to accommodate these debts.
I would also advise that you watch her cut up the credit cards once,and if,you pay them off.
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
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[d.j]

Update and thanks for your comments so far.
After long conversations today it turns out the debt is much greater. 46k to be exact (I was totally shocked as there is nothing to show for it apart from a spending habit of around £100-150 per day).

The only joint account we have is the mortgage and we are not married (this might be a blessing long term).

She has a an endowment policy worth a cash in value of 10k (looking into selling that on to see if we can get a bit more).

I have 10k savings which I am willing to give up, which leaves us needing to find 26k which I feel we would get 20k on a re mortgage and the remaining 6k on a 0% credit. This would reduce the overall repayments whilst giving us some breathing space.

Now I have told her that I am unwilling to go through this situation again (I only am now for the children) . I have told her she has to attend counselling for spending but I need some advice regards the following:
1) Preventing the receiving of credit cards and the like.
2) If we close her bank accounts and her salary is paid into mine would this reduce the chance of her getting credit? Is this viable?

I grew up in a single parent family with very little money, hence my money management is good as opposed to her who has had everything handed to her (sorry to sound bitter just can't believe how my life has changed in the space of 48 hours)

Again thanks for your comments they are appreciated.

DJ

[mish1953]

DJ
With respect I would suggest that you both need counselling .
You guys have got some hard decisions to make.

Ultimately only your partner can control her aquiring credit and using it, shes a grown up and has to make grown up decisions. She needs to get to the root of why she is spending so much and understand the conseqences.
If you take total control she wont get the chance to learn .

You cant really stop her getting cards etc ..

Sounds like you can clear the debt as you suggested and work out a livable arrangement about money , splitting living costs etc and then helping her understand that whats left can be saved or spent.

Or walk .. flog the house, split the profit, sort out the kids situation, who lives where etc and leave her to sort out her debts .

Either way there's all the emotional stuff , judgement, blame, trust, respect and dare I say love.

Sorry but it's your decision , not an easy one .

Good luck
Mish
Full time single dad for 8 years - full time work for 37 ! [:0]


Will an automatic discharge hurt.

[emma_t]

Hi d.j and welcome to the forum

I bet this is a great shock to you and especially your update as the situation is much worse than you first thought.
I am not an expert by any means, just in debt myself so cannot offer any advice on that front.
I just wanted to say that overspending often covers up a deeper emotional problem, and your wife may need help to uncover what this is and needs to address this (if this is the case) as it will be bound to happen again unless she gets help. I used to spend a lot of money on gifts for my friends/family as it used to make me feel really good, I had a chat with the doctor and a professional and they seem to think this was due to my low self esteem and my thought process that I had to 'buy' people to be liked/loved. I have also been treated for depression by my GP and feel I am now much more positive/happy and my friends/family like/love me because of me, not my extravagant gifts.
It is still very early days for me facing upto my debt but I feel so much more positive about my future now.

I had racked up £46k worth of credit cards/loans and I know that if I had asked family they would have settled this for me as it has happened many years ago.
I realised that if I didn't face up to it myself and confront the issues of why I was in trouble it would be a never ending spiral and woud be the pattern of the rest of my life, so I have entered an iva and am dealing with my this on my own.
It has taught me a very hard an valuble lesson and I am so determined to make it succesful and not to revert to old ways.

I wish you and your family lots of luck and suggest maybe getting some professional advice from an insolvancy expert (Melanie who posts on this forum is fantastic) to see what the best way forward is for you.

Best wishes
Emma

[d.j]

Thanks everyone I think counselling is the first port of call followed by a plan of action.

[MelanieGiles]

Good pastoral support from forum members who perhaps are a little more expert in that field than myself.

From a technical insolvency point of view, you could argue that the previous remortgage has eroded your partner's share of the equity, and that she no longer has a share of the property. This would be acceptable in law, and then your partner could either declare herself bankrupt, or enter into an ongoing payment arrangement with her creditors. You may well feel that this is a better route than risking even more of your personal assets, and a formal insolvency would stop her being able to obtain credit in the future thus allowing a period of readjusment which could not be supported by ongoing borrowings.

A perhaps harsh view, but you also have to think of yourself.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[d.j]

Thanks Melanie.
I don't think there is a relationship problem here (I maybe wrong) rather a deep rooted one from her youth as it now transpires her parents have bailed her out twice in the past before we met and had children. Formal insolvency whilst it seems harsh would offer myself a certain assurance that she can't do me or the kids any further financial damage.

I suppose I am looking for the best way forward to protect myself as ultimately I need to ensure my children's future.

Thanks again I am sure I will be back in touch.

[Martin2011]

Having been a therapist for a number of years, counselling may well be of longer term value, but in the here and now, Melanie's advice sounds most effective, both at limiting the damage to that already caused and preventing your partner being able to acquire further credit...

It's a hard route to take though, for you and for her, so you'll want to give it plenty of thought.

Best of luck whatever you decide.

Martin

[Skippy]

I don't want to sound harsh, but I would go along with Melanie's advice as if people keep bailing her out she will never learn the value of money as she won't have to. Bankruptcy could be the best way forward for her as she won't be able to get credit for 6 years, and this, along with counselling will hopefully help her.

Whatever you decide I wish you both all the best x

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[johnz]

Ok, am gonna take a deep breath here, bite the bullet and be honest with you.

I am a wife who has done this to my husband 3 times. The first time he bailed me out by remortgaging. The second time I got a consolidation loan and he reduced my input into the home finances to pay for it. This time, I'm on my own. He has refused to give me any help at all. And you know what. That is what's keeping me on the straight and narrow. I sort it, or I lose my husband. It's that simple.

Like your wife, I have nothing to show for the money I spent. I've had 2 goes at councelling (several sessions each time), and I would recommend it. But it is an ongoing process. My problems stem from an abusive childhood and serious long term illness which made me feel insecure and unworthy of anyones love or friendship. I felt I had to earn it by buying things for them, paying for nights out, etc. I need to get back into councelling badly, but unfortunately can't get it on the nhs here and can't afford it privately.

That said, no matter what has gone on in the past, everyone has to take reponsibility for their own present and future. One thing I've learned (and it was a very harsh lesson to learn) is that if you dwell on the bad things that have happened in the past it can, and will destroy your future. For years I have blamed my parents and anyone else for my faults. But that has got me nowhere.

It sounds like your wife does need help, but you have to distinguish between help and taking responsibility. If you take responsibility for this for her, she will never learn how to be responsible for herself. It will be difficult for you and there will be arguments, but I honestly think that "tough love" is the best way forward.

One of the things I try to do is take my mistakes and try to help others with that experience. So I really do hope this helps.

Johnz

[johnz]

Hi DJ.

I was just wondering how you were doing? We haven't heard from you in a while. Are you ok?

Johnz

[d.j]

HI Johnz.

we (the family) usually spend it with our parents, hence the silence (sorry for that).
In terms of how things are going

1) We have talked and talked and she is facing up to her responsibilities.
2) I took your advice and told her about this forum and more specifically your comments regarding sorting (HER) debt out herself, this seemed to hit a nerve and sparked her into being proactive rather then reactive.
3) We decided to let Christmas pass before committing to any decisions and we are both going to arrange to see a credit counsellor asap.
4) I have thought through a workable solution which I need to sound out a credit advisor first. (will let you know the results).
5) I feel more positive as I don't view it as my debt any more and my partner knows that if this is not sorted and further credit sought then our relationship is over.

Personally I would like to thank everyone's comments and advice. When I first encountered a situation like this my immediate was to pay it all off (as I did the first 25k) but then when it happens again and I realised there was a real danger to my financial security it was a very real reality check and a sense of panic ensues. I only wish I had sought advice the first time round as I would have tried to get her help in order to prevent our current situation (hindsight a wonderful thing).

Whilst our situation has not changed we now have a clear plan of action and are ready to embark on our journey of payback, I will keep you posted as to how we (hopefully) overcome the situation.

Another plus for the forum, my partner has read through and posted many times on the forum and has found it most helpful (It has dawned on us both that our communication had deteriorated quite a bit but now seems to be on track again).
I sure she will post up many more times as the forum provides her a sounding board to throw open discussions to people with similar spending habits.

DJ.

[emma_t]

Hi DJ

It is great to hear you sounding more positive.

I think your wife will find this forum beneficial as there is always someone around who knows what she is facing/feeling and she can get support and guidance.

Take care and have a Happy New Year