My wife has run up massive debts

[pitbull]

Should I make any attempt to help her with payments or will that be seen as me involving myself in her debt, or should I just let her default on the payments?

[catullus]

Helping her to meet the payments wouldn't have any impact on you but she needs to be forced to address her financial position, and you helping will only put this off, so if I was you I would refuse to help.

I can't imagine with her credit record that she will be able to borrow more so it will only be a matter of time.

[pitbull]

Ironic thing is that because I have been bailing her out for so long, she actually has a pretty good credit record. Its just that its ultimately taken me to the point of 0 equity now, and she's on the move because i'm out of money.

[catullus]

Well Dave, it won't take very long for her to discover the error of her ways and I'm sorry that you are in this position.

Let's hope that between you, you can find a way forward that has as little impact on the children, as is possible.

[sonyse2t5]

There was another post from someone called Liedto on this site and her hubby ran up mega debts debts is secret. Some people cannot see the wood for the tree anymore and they keep borrowing and borrowing as there is a secured peoperty lenders will keep lending and lending so on.

The chain must be severed now for both of your sakes.
She'll need to sort out some payment plan with lenders, not too late - a DMP maybe.

Credit spending is like a drug. Banks are the dealers!

[dave_t]

If my wife enters into an IVA agreement to sort out debts in her name, will her monthly outgoings also have to include her responsibilities to the house mortgage and the 90K loan? Because obviously if we are going to divorce and settle at some point, I do not want to pay everything and increase the equity which she will have access to later as part of the IVA?

[MelanieGiles]

Yes - these costs will be shared between you, generally in the same ratios as your individual earnings to the household income.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[dave_t]

Thanks Melanie, I'm trying to do some sort of financial projection... could you pls tell me which household/mortgage costs will be taken into consideration for my wife.. ie. Just mortgage/secured loan, or also to include council tax, gas/elec, food etc.? Also once these costs are deducted, approximately what percentage of the rest will be the IVA payment?

[MelanieGiles]

Dave you need to take both your salaries and other houshold income, and then deduct all household income and personal expenditure from this to work out your disposable income which will be the figure she requires to offer to the IVA.

I have a form on my website which you may find useful.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[dave_t]

If my wife enters into an IVA agreement for her debts, and she is joint owner of the house with me, and if she is required to give-up equity at some point, how will taht be achieved? Will I be forced to buy out her share?

[catullus]

Dave

It's likely that she would be required to remortgage her share of the equity in year 4 of an IVA but in practise this couldn't be done without your support or consent because it would also effectively require you to remortgage, unless your existing lender was prepared to top up the mortgage, and even that you would have to agree to.

Alternatively, you could buy out her equity (if she was prepared to sell).

In the context of a divorce that you were mentioning above I think that I know where you are going with this one.

[MelanieGiles]

If there is a chance that you are going to separate, with your wife entering into an IVA, it might be better for her to try and deal with the equity situation in the first year, rather than leave it until the end. This is usually done via matrimonial proceedings in any case.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[dave_t]

Any thoughts on whether its better to start the IVA process before divorce proceedings or the other way around??

[MelanieGiles]

There is no benefit of either, to be frank, but if I were advising you rather than your wife perhaps the divorce proceedings are better commenced first so that you take legal advice yourself as to the division of assets and you can then make plans to either sell the house and divide the equity, or for you to acquire your wife's beneficial interest if you intend to remain in the property.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[dave_t]

Hi,
I have spoken to my wife about this issue and she really doesn't know what to do. Is there anyone who can direct me to an Insolvency Practitioner in the Sussex area, and maybe I can set something up for her?