wife's debts

[brasic]

Hello, I am new here but have been reading with interest

I recently found out that my wife has run up debts of around 40K and she has confessed to me. They are all in her name and she does not work. Her father has offered her 10K to try to get her out of it but he does not know the full extent of the problem.

I was so angry at first but by coming here I now understand that she is suffering, I work away so she is alone much of the time.

I dont think an IVA is suitable as with only 10K the fees would mean a less than 25% offer. Can I/she offer this directly to the creditors? The debts are with GE Money, HFC bank, next and kays and provident. We took advice and were advised that she go bankrupt but I would rather avoid this as I feel she has suffered enough.

I am the owner of the house but there is very little equity so I cannot release any. I really dont earn enough to pay off these debts for her. Its causing tremdous friction between my family and her and I just want to get it sorted.

Any advice would be appreciated

shawn

[Skippy]

Hi brasic and welcome to the forum.

First of all, there is a way out of this. Don't be angry at your wife, as you say she is now suffering. I have been lucky in that my partner has supported me throughout everything.

If your wife is not working she would be unable to go for an IVA, but she has nothing to lose by approaching her creditors herself and making an offer to them. Although you do not want her to go bankrupt, her creditors don't know this. They will be getting more from the lump sum than if she was to go BR, so you can use that as leverage.

Good luck, and keep posting to let us know how things go for you both.

Onwards and upwards!!!

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

[gimmewine]

Hi Brasic, a big welcome here as well.

Question from me, have you got your wife to look at this forum? Reason I am asking is that she is probably feeling real low right now, and it is a tremendous help to know there are lots of others who have fallen into the debt trap. The reasons can be so simple, a change of life circumstances, loneliness, keeping up with the neighbours. If you don't want her to see your post there is another debt forum debtquestions.co.uk I think where they have heading of IVA, bankruptcy, budgeting, off topic, really good to read.

As for the friction between your family and your wife, I would deal with that before you have to go away again, because otherwise the pressure may add to the guilt and may have the opposite effect of setting her spending again. Have a word with them, saying you think it's brave she is facing up to this, and that you support her all the way and expect the same from them. Then, if the offer is not accepted and you need to reconsider bankruptcy, they already know you are 100% behind her.

Remember, there is a solution to every debt problem, and even if the solution is not what you planned, us humans have a habit of picking ourselves up and look for brighter days. I wish you a great many brighter days.

Ann

[go_4_broke]

Hi Shawn,

Sorry to hear about you/your wife's situation.

Being realistic I think it is very unlikely that an offer that low would be acceptable, even 40% would only be 'starting to get there'.

The reason 25% can be acceptable in an IVA is that the situation has been thoroughly investigated and it has been established that it is the maximum that can be afforded.

So the only way you might get there is via a 'short settlement' IVA which would of course include a fee element but less than that for a full 5 year IVA.

You wife will not have been advised to go bankrupt without good reason. It still would seem by far her best option, and apart from actually 'being bankrupt' for a year she would have nothing further to pay, and your family would save £10,000.

It is not supposed to be a punitive process although many view it as such. A quick scan around the forum will reveal that for people who have done it, the 'Bark is a lot worse then the Bite'.

If it seems harsh on her creditors, simply ask the question 'What kind of fool would lend money to someone with no income and expect to get it back ?'

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

[brasic]

Gee,

Thank you for your lovely kind replies.

My wife was working at the time but we moved away and now we are trying for a child, I will try to approach the creditors with the offer and mention that BR is the only other option, they might accpet it, if not we will think again. I have had a look at the BR site and so has she. Her friend told her about this site and has been quite supportive, I think she was ashamed at posting here herself. I am not sure about my house in BR though. If its affected or not as we are married now. My family will come round I am sure as I am now 100 per cent behind my wife, thanks to you good people and your posts. What I am really struggling with is that most of the stuff she bought remains unopened and unused. Would it be Ok to sell it all, a boot sale perhaps or would it all be regarded assets in BR?

If all else fails she could go back to work and do an IVA on her own, right?

Thanks again

shawn

[go_4_broke]

Hi Shawn

If your wife has no separate income and has not contributed to the house or the initial deposit directly or indirectly she should not be considered to have a beneficial interest and you should be safe but it is something to watch for.

In respect of the items purchased it probably ought to be declared as a job lot and it seems highly possible your wife may be glad to see the back of them.

However this is a bit of a grey area as normal low-value domestic items do not need to be declared and it is highly unlikely the OR would check up on it anyway.

Your best bet would probably be to declare a list and have the OR disclaim then if they are not interested.

And yes, I see no reason why she should not take on an IVA or other debt solution if she is able to generate an income.

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

[MelanieGiles]

Hi brasic

As a professional, I really do feel that your wife's best option is to declare herself bankrupt. Then if her family are prepared to help you to acquire her interest (if any) in the property that is probably money well spent.

The Official Receiver will not be interested in your wife's purchases, which in reality will not be worth much at all. I suggest that she opens them up and hangs them in the wardrobe!

It seems to me that a fresh start is needed here - especially as your wife is not coping well with the situation. Most people still view bankruptcy as a punishment or something to be ashamed about, rather than the sanctuary to get away from oppressive debt which in reality it is. These days the procedure is very simple, and sometimes you don't even have to appear in front of a judge.

Many people use comfort shopping as an emotional prop, and your wife should not feel bad about what has happened. The great thing is that she has now felt able to share her difficulties with you which often is the hardest part of financial recovery. She is lucky that she has a very understanding husband, and I wish you well for the future.

Whereas I would not recommend an IVA for your wife, you ought to be aware that one could be proposed based upon your earnings. You would need to be making payments in the region of £300 per month to be acceptable to creditors.

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

[brasic]

Thank you all

I have a lot to think about and we are due to meet her family next weekend. To be honest I was not very understanding at first but reading some of the posts I now feel quite guilty by my own reaction. This can happen to all sorts of people. I feel this 'window' experience that I have had by coming here has made me realise what is actually important in life and I hope to take something from it. I am sure our future will be better for this experience and I want to thank you all for your kindness and advice. It really means a lot and I feel very humbled.

Thank you all so much

shawn