“Dear Steve,
I have approx. 65-70K in credit card debt. I am in credit counseling.
My current payment to them is $1600 a month. I have been paying for this for almost ten months. My husband does not know. I have kept this from him, so he has no idea how bad it is.
Due to other bills being raised, such as our mortgage going up this year (due to insurance and taxes rising), our car insurance went up and will probably go up again in about six months because our son is turning 16. I can no longer handle this amt.
It was already difficult to manage, and now it will be impossible. My credit, I think, was beginning to improve. I am starting to get credit card offers instead of DMP mailings (though I still get those too.) But I missed a payment in June because it is auto withdrawn. I was $25 short when it came through because another auto-withdrawal (that isn’t supposed to happen until the 1st of the month) came through. I was to send cashiers to check or money order to pay it and to be honest, I live in a tiny town and work 30 minutes from my credit union, so it is impossible to get to it any day during the week except for Fridays and the first couple of weeks after the payment was due I couldn’t get there because I had to work late and then by that time some of the money was used for other things that had come up during the month that were unexpected.
I know I shouldn’t have done that, but sometimes you must do what you have to do. Now my credit is going to take a hit again. I don’t know what my score is. I think probably in the low to mid 500s, but it could be lower. My husband, on the other hand, has decent credit. I believe it is in the high 700s-800s. I need to do something where my payments are not so high. My 16-year-old son goes to a catholic school with tuition of around $3500 a year, and because of my problems, I haven’t even been able to pay off last year’s tuition, and the new year is about to begin. If this weren’t his junior year in high school, I would consider moving him to public school, but I don’t want to take him out with only two years left. He has been in this school since he was in kindergarten.
Regarding our mortgage, we only owe around $36,000, and our home is worth approximately $ 175,000 or more. I have looked online at different banks and interest rates and used the calculators to figure payments on $120,000 for 15 years. When I figure this out, it gives an estimated payment of $1200-1400 dollars a month- this would lower our total payments on loans and credit cards from approximately $3000 a month to that amount which would save us quite a bit of money every month. By the way, my husband and I make approx. a combined total of $110,000 a year.
I guess my question for you is it the right thing to do to refinance our home and consolidate all our loans and credit card debt. If so, would it be better if my husband did the refinancing alone since his credit score is better and mine might hurt us, and then we would get turned down? Also, I am having difficulty finding a way to tell my husband about this debt- embarrassed and afraid of what will happen after I tell him. Thank you for any advice you might be able to offer.
Vicki”
Dear Vicki,
Over my many years of helping people, I’ve helped plenty of people in the same situation, debt infidelity.
Before we start to worry about a solution, and there will be one, the first step you need to take is to come clean with your husband.
Any spouse deserves to know the reality of their financial obligations, and unless he is an abusive spouse, you should tell him. If he is abusive, you need to deal with that first.
By doing nothing, the debt hole only gets deeper and deeper. The unpaid tuition is an excellent example of how deep it is now.
I suggest you find some alone time and tell him and share the reality of the situation, laying it all out and being 100% honest.
Once you do that, he may be hurt, disappointed, or angry; quite frankly, he probably has every right to feel like that. And while the air might be chilly between the two of you for a short period of time, it always thaws, and the people come back together to work it out.
The first issue after that we need to tackle is what you spent all that money on? Money problems are never about the money. They are about the underlying issues that lead people into debt. So we need to stop whatever that was that took you deep in debt, so we are not filling half the hole up, and we are trying to dig out.
Have the conversation with your husband and then come back and update me in the comments. I’ll help you towards the next step but let’s get through this one first.
Please update me on your progress by
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