“Dear Steve,
Hi – I am 48; I have no debt; I own my home with less than $80,000 left on the mortgage and I pay 1-2 extra payments each year; no credit card dept -I pay ithem both off each month; no car payments; low income ($1500 pm) but I am working on a masters so I hope that may change next year. I got out a pension plan from to pay for it.
The thing is I have a boyfriend (52) who owns a 4 bedroomed house 120 miles away. We’ve been “dating” almost 9 years. He is probably in negative equity. He borrowed too much on his home to start a business so it is worth less than he could sell it for. He owes over 500,000 on it. At one time it would have sold for over $700,000; Has about $30,000 in credit card dept; was made redundant in April; has a small business selling office supplies to government orgs who are obliged to buy 4% of their office products from Veteran owned businesses. Since May he has been able to meet the $3400 a month payments on his house…sometimes it is touch and go.
He has had a bankrupcy from 7 years ago. He does not want to give up his house or the massive payments as his credit is shot to pieces and he wont be able to buy again. He does not help out with the bills even though he usually lives at my place. We broke up for 4 months because I am having a hard time with his fiscal management and have been angry about the lack of contribution for years when he earned 3 times my salary.
We are trying to give it another go. A condition is that he talks to me about his debts which he has avoided for years.
P.S. he has a lot of “STUFF” and I own a 3 bedroom condo that cannot accomodate it all…or very much at all really. If I manage to get a decent paying job after graduation I will try and rent mine out and buy a small house. I know this is long winded but I dont know what the conversation is he and I need to have. I don’t know the questions to ask. I don’t know if I can stay with this committment phobic man in debt. Anyway your advice may help get my thoughts straight even if it can’t help with his stubborn streak. If I read this from someone else I would be telling them to run like hell….but he is the kindest man I have ever met and he understands me so I dont have to explain. Not many of them around you know?
The question: should he sell his house and risk not being able to buy again because of his credit or should he risk not meeting the payments and being forced into a second bankrupcy?
Thanks so much
Jan”
Dear Jan,
Thank you for your excellent question.
I suspect there are a number of underlying issues going on with your boyfriend that all collaborate to create the perfect financial storm for him. None of them are your fault or your responsibility. In fact the worst thing you could do is bail him out or enable his bad behavior. That’s going to be the tough part. for you.
Without knowing more about him I would guess that he is a charismatic fellow that enjoys the excitement of the business creation and sales process but is not very detail oriented. He probably is or has been the spender in the relationship and focus on the financial issues probably creates agitation and stress for him. That then creates tension in your relationship.
As you keep him in your life, you are very right to protect yourself carefully. If you don’t set your boundaries then he will push what responsibilities he has not dealt with on to you. For example, if he has loads of stuff but he needs a place to put it, that place will probably be your house. But ultimately he does not need a place to store he, he needs to deal with it. At the end of the day, no matter how wonderful the stuff is, it’s just material possessions.
When I moved to the UK a few years ago I got rid of 80% of my stuff I had been lugging around with me for years. It was painful at first but a very liberating process. I no longer had to spend money on a big house to hold my stuff and cart it around.
We got a storage place to keep our “most important” stuff we could not take to the UK with us. What was funny is that when we moved back to the U.S. a couple of years latter, most of the “really important” stuff didn’t seem all that important any more.
My father-in-law remarried after his wife passed away. His new wife and he consolidated their places and both are pack rats. The amount of stuff they have shoved into the house they live in is stunning and for everyone that visits it is a stressful experience. In fact people opt not to visit so they don’t have to deal with the stuff.
Regarding your boyfriends financial situation, it is what it is. It sounds like, for whatever reason, he is no longer able to sustain his past life on present or future income and he is not willing to deal with the reality of his situation. This will leave him in denial and accelerate his path down towards a bad ending. Before he knows it he is going to be out of money and out of options.
He seems to be an overachiever at issue avoidance through charm and kindness.
While I understand his apprehension or avoidance of bankruptcy, it is a bit like a climber that has fallen over a cliff asking that the rescue rope not be yellow. He is not in a position to make certain demands here. The bankruptcy isn’t the problem here, it is the decisions that were made and risks taken that lead him into this situation.
Personally, I think the best thing you can do for him is to be a friend, but not an enabler. You can offer to help him find a solution, but you certainly don’t have to get a better job, and make more money, so he has a place for his stuff. You can help him to clean out his stuff, and go with him to talk to a local bankruptcy attorney to discuss his situation. You can be a friend to listen and be a sounding board, but not his bank or lender.
It is very important that as your income increases that you are thinking of yourself. This means saving more, investing more and preparing for a future when you will not be earning money. As kind and loving as your boyfriend is, if you allow him to, he will suck your future dry because of intentional avoidance. He may not see this now.
Bankruptcy is not the end of the world. He had a past bankruptcy and purchased real estate again. He can do it again. The pathway to his success will be how completely he deals with the underlying issues and does not drag those forward with him.
Please keep me posted on what happens here by updating me in the comments section below. I really do care and want to know how this turns out.
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