Unknown credit card debt - Talk About Marriage
Financial Problems in Marriage When financial times are tough, it adds to the stress we deal with on a daily basis. This section is for talking about how financial problems affect our relationships and ways to cope.

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post #1 of 27 (permalink) Old 05-19-2017, 07:38 AM Thread Starter
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Unknown credit card debt

I am have been with my partner for 8 years. Just this year we were married. I wanted a cheap wedding.. she promised me it would be cheap. My parents gave us $10k for the wedding and my sister gave us $2k. Her parents gave nothing.

She also organised 2 credit cards with a $15k limit and Frequent Flyer points every purchase, she said we just had to pay it off.

She earns about $100k a year I earn about $50k a year. We have a combined account, since she is the bread winner I give her full control of the finances.

I knew we had some debt from the wedding, I was thinking along the lines of $20k, which didn't really bother me too much.Just recently, I stumbled across her mobile banking app. I noticed we were $38k in debt. I immediately questioned her about it and she went into denial- but it was blatantly clear. I did some simple math... and figured that she also probably hadn't paid back the debt from the other 2 credit cards.. which I was correct. We owed $30k combined at about 18% interest. She crumbled and admitted that she originally paid the two frequent flyer cards off but then ended up maxing them again. So we were about $68k in debt.

After further exploration, I discover that the couch that we bought hasn't been paid off $2k,m and another credit card with $2k outstanding.

By this time I'm spitting chips, I'm losing my mind. Once upon a time when in my early 20s I was terrible with money- but nothing like this!

She says things got out of hand, she was secretly trying to pay things off but the debt was spiralling out of control. I decide to take over the accounts. She can't be trusted. I sit down and figure out everything that needs to be paid off. We wait for the date that we are both getting paid and decide to divvy out what needs to be paid off first . We also give ourselves strict rules about spending.

Pay day rolls around and I say I will be in charge. I look at the bank account and notice there is $500 missing... I question her and she denies, I look her in the eye and question again. Turns out the new car she bought about 4 years ago hasn't been fully paid off. She told me it had. We still owe $7k on it.

All up we are about $80k in debt.

She is looking for a new job, there is a position in Melbourne ( we are from Sydney). Paying about $10k less. But it is career progression. I am a freelance photographer and would need to set up my network there. Her payout (long service leave etc) from her current job would apparently be about $30k

Is it a wise move to move to another city ? We are both 32. No kids.

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post #2 of 27 (permalink) Old 05-19-2017, 07:46 AM
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Re: Unknown credit card debt

Some folks, well frankly most folks, say about 85%, are not capable of handling credit cards.

Cancel them!!! Then set up a payment schedule to put them out of your misery. Then accept the fact that you will be using debit cards from now on. You may bottom out, but you won't sink to the bottom of the ocean.
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post #3 of 27 (permalink) Old 05-19-2017, 08:11 AM
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Re: Unknown credit card debt

Having all this debt speaks to some serious character flaws and on top of it she was lying to you about it. You already said that you can't trust her with money and credit cards. I would be worried about what else she's hid from you. Before you even think about moving you have to sit her down and have a serious conversation with her about lying and trust.

I would be very skeptical about continuing in this marriage. Some who is lying to you this frequently about major things is not someone you want to be married to and start a family. I got lied to shortly after we got married to and it basically wrecked our lives. I was foolish and continued to stay in the marriage. Now I wish I hadn't. Don't be a fool like I was. With all these red flags waving get out while you can. Don't move to another city and have to redo you client base.

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post #4 of 27 (permalink) Old 05-19-2017, 08:11 AM
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Re: Unknown credit card debt

Get the debt under control as @syhoybenden said; cancel the credit cards, cut them up.

This debt problem may spill out and over into the emotional reserve tank. It will taint and drain that too.

Money problems is one of the top reasons for divorcing.

This....This is the nub of the stick that pokes me in the eye when the light of day energizes my optic nerve....SunCMars.... The Allegory of the Cave--> On this, I did a '180' and stepped out.

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post #5 of 27 (permalink) Old 05-19-2017, 08:17 AM
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Re: Unknown credit card debt

I am not in Australia, however, I am a financial professional in another commonwealth country, Canada, therefore, our laws are somewhat similar. I seriously recommend that you go to a credit counselor in Sydney. I do not recommend moving or taking another position at this time, your incomes are needed to satisfy your debts, and every other consideration is not possible at this time.

If your figures are correct, between the two of you, you earn combined Aus$150K. Your debt stands at around Aus$87K. That represents nearly 60% of your annual gross income, deduct income tax, which, I understand is fairly high in Australia, much like Canada, so we are looking at minimum deduction from pay at $37,5K, and your take-home (if you have pensions, it will be lower as well) or Aus$113, making your income/debt ratio 77% of net take-home. That ratio is significant. Under normal circumstances, could you live on the balance so that debt can be satisfied within a year? I believe that such a ratio should qualify you for credit counseling. If the banking/credit laws are similar, then you should be able to make a consumer proposal, wherein you could have your debt reduced, and a payment schedule lasting 1, possibly 2 years could be arranged.

Since both of you have had a spotty credit history, I recommend that after your debts are satisfied, you either do not use credit, or restrict yourself to one card and develop a relationship with it so that it is paid off by the 15th of the following month.
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post #6 of 27 (permalink) Old 05-19-2017, 08:20 AM
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Re: Unknown credit card debt

@farsidejunky

One of the deepest feminine pleasures is when a man stands full, present, and unreactive in the midst of his woman's emotional storms. When he stays present with her, and loves her through the layers of wildness and closure, then she feels his trustability, and she can relax. -- David Deida, The Way of the Superior Man
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post #7 of 27 (permalink) Old 05-19-2017, 08:27 AM
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Re: Unknown credit card debt

Divorce her, ASAP. People that hide debt from you and can lie to your face will never change. The debts will always be there, even if you monitor her cards and take control of the finances. All that happens is they'll get sneakier about how they hide their debt. Next thing you know she'll be stealing from her retirement account to cover hidden bills from you.
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post #8 of 27 (permalink) Old 05-19-2017, 02:54 PM
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Re: Unknown credit card debt

Quote:
Originally Posted by Cam84 View Post
Is it a wise move to move to another city ? We are both 32. No kids.
Your financial house is on fire, and your question to the folks on TAM is whether or not you should try to wipe down the counters before you execute your fire escape plan?

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post #9 of 27 (permalink) Old 05-19-2017, 02:58 PM
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Re: Unknown credit card debt

Quote:
Originally Posted by Cam84 View Post
I am have been with my partner for 8 years. Just this year we were married. I wanted a cheap wedding.. she promised me it would be cheap. My parents gave us $10k for the wedding and my sister gave us $2k. Her parents gave nothing.

She also organised 2 credit cards with a $15k limit and Frequent Flyer points every purchase, she said we just had to pay it off.

She earns about $100k a year I earn about $50k a year. We have a combined account, since she is the bread winner I give her full control of the finances.

I knew we had some debt from the wedding, I was thinking along the lines of $20k, which didn't really bother me too much.Just recently, I stumbled across her mobile banking app. I noticed we were $38k in debt. I immediately questioned her about it and she went into denial- but it was blatantly clear. I did some simple math... and figured that she also probably hadn't paid back the debt from the other 2 credit cards.. which I was correct. We owed $30k combined at about 18% interest. She crumbled and admitted that she originally paid the two frequent flyer cards off but then ended up maxing them again. So we were about $68k in debt.

After further exploration, I discover that the couch that we bought hasn't been paid off $2k,m and another credit card with $2k outstanding.

By this time I'm spitting chips, I'm losing my mind. Once upon a time when in my early 20s I was terrible with money- but nothing like this!

She says things got out of hand, she was secretly trying to pay things off but the debt was spiralling out of control. I decide to take over the accounts. She can't be trusted. I sit down and figure out everything that needs to be paid off. We wait for the date that we are both getting paid and decide to divvy out what needs to be paid off first . We also give ourselves strict rules about spending.

Pay day rolls around and I say I will be in charge. I look at the bank account and notice there is $500 missing... I question her and she denies, I look her in the eye and question again. Turns out the new car she bought about 4 years ago hasn't been fully paid off. She told me it had. We still owe $7k on it.

All up we are about $80k in debt.

She is looking for a new job, there is a position in Melbourne ( we are from Sydney). Paying about $10k less. But it is career progression. I am a freelance photographer and would need to set up my network there. Her payout (long service leave etc) from her current job would apparently be about $30k

Is it a wise move to move to another city ? We are both 32. No kids.
I would set up a Budget plan to pay off dept, she is now on a budget like a teenager any expenses go through you, Cut her off from credit, meaning you have access to monthly credit reports so you can make sure she can't open a secret account. She gets counseling for her spending addiction. Tell her it's her last chance.
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post #10 of 27 (permalink) Old 05-19-2017, 03:21 PM
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Re: Unknown credit card debt

What was the debt spent on?

It sounds like the debt was racked up rather quickly.

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post #11 of 27 (permalink) Old 05-19-2017, 03:36 PM
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Re: Unknown credit card debt

Do what @Taxman suggests.

Make sure that you pull both of your credit reports (I assume you have that in your country).

Also, get the book Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner . Both of you would benefit from reading it.

It is important that both you and your wife are active in the financial management in your marriage. Do not just take it over and do it all by yourself. Part of fixing this is for the both of you to get on the same page and review everything at least once a month. Set up a monthly (if not weekly) financial meeting between the two of you.
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post #12 of 27 (permalink) Old 05-19-2017, 05:20 PM
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Re: Unknown credit card debt

Quote:
Originally Posted by Cam84 View Post
I am have been with my partner for 8 years. Just this year we were married. I wanted a cheap wedding.. she promised me it would be cheap. My parents gave us $10k for the wedding and my sister gave us $2k. Her parents gave nothing.

She also organised 2 credit cards with a $15k limit and Frequent Flyer points every purchase, she said we just had to pay it off.

She earns about $100k a year I earn about $50k a year. We have a combined account, since she is the bread winner I give her full control of the finances.

I knew we had some debt from the wedding, I was thinking along the lines of $20k, which didn't really bother me too much.Just recently, I stumbled across her mobile banking app. I noticed we were $38k in debt. I immediately questioned her about it and she went into denial- but it was blatantly clear. I did some simple math... and figured that she also probably hadn't paid back the debt from the other 2 credit cards.. which I was correct. We owed $30k combined at about 18% interest. She crumbled and admitted that she originally paid the two frequent flyer cards off but then ended up maxing them again. So we were about $68k in debt.

After further exploration, I discover that the couch that we bought hasn't been paid off $2k,m and another credit card with $2k outstanding.

By this time I'm spitting chips, I'm losing my mind. Once upon a time when in my early 20s I was terrible with money- but nothing like this!

She says things got out of hand, she was secretly trying to pay things off but the debt was spiralling out of control. I decide to take over the accounts. She can't be trusted. I sit down and figure out everything that needs to be paid off. We wait for the date that we are both getting paid and decide to divvy out what needs to be paid off first . We also give ourselves strict rules about spending.

Pay day rolls around and I say I will be in charge. I look at the bank account and notice there is $500 missing... I question her and she denies, I look her in the eye and question again. Turns out the new car she bought about 4 years ago hasn't been fully paid off. She told me it had. We still owe $7k on it.

All up we are about $80k in debt.

She is looking for a new job, there is a position in Melbourne ( we are from Sydney). Paying about $10k less. But it is career progression. I am a freelance photographer and would need to set up my network there. Her payout (long service leave etc) from her current job would apparently be about $30k

Is it a wise move to move to another city ? We are both 32. No kids.
Do you own your own home or do you have sufficient equity in it to arrange a personal loan to pay off at least some of this credit card debt.I don't know the interest rates in Australia but I would think a loan or even a remortgage would be at a lower interest rate than you are paying.Moving from Sydney right now would be foolish in my opinion,you say it would be ten grand less in salary but with a thirty grand pay off,but what about all the moving costs involved,this is a journey of about nine hundred KM if I recall correctly.Would this payoff be taxed.You can't run away from this debt and adding more on to it is a ridiculous undertaking for some "career advancement"that may never match the salary she is earning.
Wtf is someone eighty grand in debt doing paying two grand for a couch.What size car does she drive if after four years the loan is still five hundred a month and how much does it cost to run.You are self employed,can you drive her to work and collect her or can she use public transport.Cut up the credit cards immediately,sell one or both cars and get something smaller and cheaper to run.You are screwing up your credit score for years to come if you don't take action to reduce this debt.
Both of you are living a lifestyle that you can't afford and you can't blame your wife for everything,you had your head in the sand over the preparations for the wedding and now you are paying for it.
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post #13 of 27 (permalink) Old 05-19-2017, 06:20 PM
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Re: Unknown credit card debt

Paying off the debt by selling the home will only be a bandaid, if the core problems for the debt aren't dealt with.

Mr. IMFAR and I have been in debt twice. The first time we paid it off by cashing out some investments (that we had never intended to cash out) to pay off the debt. We didn't get on a budget, or have a plan, so debt rose again, and this time I put my foot down and refused to cash out what was left of my inheritance. We put ourselves on a strict budget and are $4K from paying it off, which should take 5 months at the rate we have been going. Then we have agreed to never have debt again (except a mortgage.)

I'm not a financial planner, but this is what worked for us:
1. You both have to be 100% honest and on the same page regarding finances.
2. Make a budget of all the costs you have, or will have, including what you can afford to allow yourselves for "mad" money (coffee, etc.) You each have your own "mad" money. Never spend $ you have not budgeted for. All excess $ goes toward paying off debt.
3. If you have run out of money for a certain category in your budget, then you can spend no more until the next budget cycle.
4. Cut up all but one credit card, and use it only for bills that must be paid using a credit card. Pay the card with the $ you have set aside in your budget for that bill.
5. After the debt is paid, you can begin to set aside $ for things like car, vacation, new house, etc.
6. Never buy something unless you have already saved the $ to pay for it. If you have to use a card (i.e. vacation) then pay off the card with the $ you pre-saved for the vacation.

**The idea is that without a budget, people will spend all they have, and then some, no matter how much they make. That is exactly what we did. You have to designate where all your money will go, so the $ isn't spent frivolously, and never, ever, use a credit card unless you have set aside the cash to pay it off in full that month.

We learned all these principals from Dave Ramsey. You will find his program called Financial Peace University online. It works. If we had learned this in our 20's we would be millionaires with no debt by now.

If your wife still owes $7K on her car, perhaps she needs to sell it, and buy a less expensive car, and use the excess cash towards other debts. Is there anything else either of you can sell, of value to pay the debts.

By no means move, or take a lower paying job until the debt problem has been dealt with.
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post #14 of 27 (permalink) Old 05-19-2017, 06:30 PM
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Re: Unknown credit card debt

First, read EleGirl's post, then read it again.

I have taken the position that since these two are rather young and have their entire lives before them. FIRST they do not have handle on the word "No", when it comes to purchases. Unfortunately, this has been my experience through 40 years of practice. Many kids make their way through school with mom and dad footing the bill, then they get out making a decent salary and have absolutely no idea how to handle money. Once they get a handle on their finances, I cannot stress how important a biweekly meeting to discuss finances will be for your future. Given both of your incomes, when this is all done, you will have a much better time discussing investments, mutual funds and treasury bills.

My eldest is finishing her residency in Obstetrics and Gynecology. She has been asked into a practice. We are looking at a significant starting income, with some startling expenses on a monthly basis. I am grateful that both her medical school and her residency program ensured that the young doctors had a year's worth of classes in handling money. The practice that she is going into comes with it's own accountant. I will be consulted, but I do not want to be part of the day to day. I will not be around forever, and I want to ensure that she will know how to handle income and reduce debt. (Professional loans granted on admission to medical school-I have never seen bankers trip over themselves to lend her a quarter-million, on signature. Wow.)

Last edited by Taxman; 05-19-2017 at 06:43 PM.
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post #15 of 27 (permalink) Old 05-19-2017, 09:06 PM
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Re: Unknown credit card debt

Make double, triply sure she doesn't get pregnant.

That's a whole lotta money. What is there around the house, in her jewelry box, etc. etc.; that would account for the debt?

If you can't connect any physical purchases with the debt---then where did the money go?

If there are a lot of high ticket items about, if she's taken lots of trips, buys $500 shoes, etc. etc., then where did you think she was getting all the money?
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